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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1987 

                        CHAPTER 291-S.F.No. 170 
           An act relating to economic development; recodifying 
          provisions governing housing and redevelopment 
          authorities, port authorities, economic development 
          authorities, area redevelopment, municipal development 
          districts, mined underground space development, rural 
          development finance authorities, public development 
          debt, enterprise zones, tax increment financing, and 
          other local economic development tools; extending 
          duration of bond allocation act; removing certain 
          service persons' preference provisions from the 
          housing and redevelopment authority law; modifying 
          requirements for developers' tax abatements under the 
          housing and redevelopment authority law; removing a 
          sunset on certain St. Paul port authority provisions; 
          amending Minnesota Statutes 1986, sections 16B.61, 
          subdivision 3; 41A.05, subdivision 2; 41A.06, 
          subdivision 5; 115A.69, subdivision 9; 116J.27, 
          subdivision 4; 116M.03, subdivisions 11, 19, and 28; 
          116M.06, subdivision 3; 116M.07, subdivision 11; 
          124.214, subdivision 3; 216B.49, subdivision 7; 
          268.38, subdivision 3; 272.02, subdivision 5; 272.026; 
          272.68, subdivision 4; 273.13, subdivisions 9 and 24; 
          273.1393; 282.01, subdivision 1; 290.61; 298.2211, 
          subdivisions 1 and 3; 353.01, subdivision 6; 355.11, 
          subdivision 5; 355.16; 412.251; 462C.02, subdivisions 
          6 and 9; 462C.05, subdivision 7; 462C.06; 465.54; 
          465.74, subdivision 7; 465.77; 471A.03, subdivision 9; 
          473.195, subdivision 1; 473.201, subdivision 1; 
          473.504, subdivision 11; 473.556, subdivision 6; 
          473.638, subdivision 2; 473.811, subdivision 8; 
          473.852, subdivision 6; 473F.02, subdivision 3; 
          473F.05; 473F.08, subdivisions 2, 4, and 6; 475.525, 
          subdivision 3; 477A.011, subdivision 7; 504.24, 
          subdivision 2; and 609.321, subdivision 12;  repealing 
          Minnesota Statutes 1986, sections 273.1312; 273.1313; 
          273.1314; 273.71; 273.72; 273.73; 273.74; 273.75; 
          273.76; 273.77; 273.78; 273.86; 362A.01; 362A.02; 
          362A.03; 362A.04; 362A.041; 362A.05; 362A.06; 373.31; 
          426.055; 458.09; 458.091; 458.10; 458.11; 458.12; 
          458.14; 458.15; 458.16; 458.17; 458.18; 458.19; 
          458.191; 458.192; 458.193; 458.194; 458.1941; 458.195; 
          458.196; 458.197; 458.198; 458.199; 458.1991; 458.70; 
          458.701; 458.702; 458.703; 458.711; 458.712; 458.713; 
          458.72; 458.74; 458.741; 458.75; 458.76; 458.77; 
          458.771; 458.772; 458.773; 458.774; 458.775; 458.776; 
          458.777; 458.778; 458.79; 458.80; 458.801; 458.81; 
          458C.01; 458C.03; 458C.04; 458C.05; 458C.06; 458C.07; 
          458C.08; 458C.09; 458C.10; 458C.11; 458C.12; 458C.13; 
          458C.14; 458C.15; 458C.16; 458C.17; 458C.18; 458C.19; 
          458C.20; 458C.22; 458C.23; 459.01; 459.02; 459.03; 
          459.04; 459.05; 459.31; 459.32; 459.33; 459.34; 
          462.411; 462.415; 462.421; 462.425; 462.426; 462.427; 
          462.428; 462.429; 462.4291; 462.432; 462.435; 462.441; 
          462.445; 462.451; 462.455; 462.461; 462.465; 462.466; 
          462.471; 462.475; 462.481; 462.485; 462.491; 462.495; 
          462.501; 462.505; 462.511; 462.515; 462.521; 462.525; 
          462.531; 462.535; 462.541; 462.545; 462.551; 462.555; 
          462.556; 462.561; 462.565; 462.571; 462.575; 462.581; 
          462.585; 462.591; 462.595; 462.601; 462.605; 462.611; 
          462.615; 462.621; 462.625; 462.631; 462.635; 462.641; 
          462.645; 462.651; 462.655; 462.661; 462.665; 462.671; 
          462.675; 462.681; 462.685; 462.691; 462.695; 462.701; 
          462.705; 462.712; 462.713; 462.714; 462.715; 462.716; 
          465.026; 465.53; 465.55; 465.56; 472.01; 472.02; 
          472.03; 472.04; 472.05; 472.06; 472.07; 472.08; 
          472.09; 472.10; 472.11; 472.12; 472.125; 472.13; 
          472.14; 472.15; 472.16; 472A.01; 472A.02; 472A.03; 
          472A.04; 472A.05; 472A.06; 472A.07; 472A.09; 472A.10; 
          472A.11; 472A.12; 472A.13; 472B.01; 472B.02; 472B.03; 
          472B.04; 472B.05; 472B.06; 472B.07; 472B.08; 474.01; 
          474.02; 474.03; 474.04; 474.05; 474.06; 474.07; 
          474.08; 474.09; 474.10; 474.11; 474.13; 474.15; Laws 
          1961, chapter 545; Laws 1963, chapters 254; and 827; 
          Laws 1967, chapter 541; Laws 1969, chapter 98; Laws 
          1973, chapter 114; Laws 1974, chapter 218; Laws 1975, 
          chapter 326; Laws 1976, chapter 234, section 3; Laws 
          1979, chapter 269, section 1; Laws 1980, chapters 453; 
          and 595, sections 5 and 8; Laws 1982, chapter 523, 
          article 24, section 2; Laws 1983, chapters 110; and 
          257, section 1; Laws 1984, chapters 397; 498; and 548, 
          section 9; and Laws 1985, chapters 173; 177; 188; 189; 
          192; 199; 205; 206, sections 2 and 3; and 301, 
          sections 3 and 4; proposing coding for new law as 
          Minnesota Statutes, chapter 469. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                 HOUSING AND REDEVELOPMENT AUTHORITIES 
    Section 1.  [469.001] [PURPOSES.] 
    The purposes of sections 1 to 47 are: 
    (1) to provide a sufficient supply of adequate, safe, and 
sanitary dwellings in order to protect the health, safety, 
morals, and welfare of the citizens of this state; 
    (2) to clear and redevelop blighted areas; 
    (3) to perform those duties according to comprehensive 
plans; 
    (4) to remedy the shortage of housing for low and moderate 
income residents, and to redevelop blighted areas, in situations 
in which private enterprise would not act without government 
participation or subsidies; and 
    (5) in cities of the first class, to provide housing for 
persons of all incomes. 
    Public participation in activities intended to meet the 
purposes of sections 1 to 47 and the exercise of powers confined 
by sections 1 to 47 are public uses and purposes for which 
private property may be acquired and public money spent.  
    Sec. 2.  [469.002] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 1 to 47, the terms 
defined in this section have the meanings given to them herein, 
unless the context indicates a different meaning. 
    Subd. 2.  [AUTHORITY.] "Authority" means a housing and 
redevelopment authority created or authorized to be created by 
sections 1 to 47. 
    Subd. 3.  [CITY.] "City" means a home rule charter or 
statutory city.  
    Subd. 4.  [STATE PUBLIC BODY.] "State public body" means 
any city, county, commission, district, authority, or other 
political subdivision or instrumentality of this state. 
    Subd. 5.  [GOVERNING BODY.] "Governing body" means the 
council, board of trustees, or other body charged with governing 
any state public body.  
    Subd. 6.  [MAYOR.] "Mayor" means the mayor of a city.  
    Subd. 7.  [CLERK.] "Clerk" means the clerk of a city or the 
officer of any other state public body charged with the duties 
customarily imposed on the clerk of a city.  
    Subd. 8.  [AREA OF OPERATION.] "Area of operation" means, 
in the case of an authority created in and for a city, county, 
or group of counties, the area within the territorial boundaries 
of that city, county, or group of counties.  
    Subd. 9.  [FEDERAL GOVERNMENT.] "Federal government" 
includes the United States of America, the department of housing 
and urban development, or any other department, agency, or 
instrumentality of the United States of America.  
    Subd. 10.  [FEDERAL LEGISLATION.] "Federal legislation" 
includes the United States Housing Act of 1937, Public Act No. 
412 of the 75th Congress of the United States, any act that 
amends it or adds to it, and any other legislation of the 
Congress of the United States relating to federal assistance for 
clearance or rehabilitation of substandard or blighted areas, 
land assembly, redevelopment projects, or housing.  
    Subd. 11.  [BLIGHTED AREA.] "Blighted area" means any area 
with buildings or improvements which, by reason of dilapidation, 
obsolescence, overcrowding, faulty arrangement or design, lack 
of ventilation, light, and sanitary facilities, excessive land 
coverage, deleterious land use, or obsolete layout, or any 
combination of these or other factors, are detrimental to the 
safety, health, morals, or welfare of the community.  
    Subd. 12.  [PROJECT.] "Project" means a housing project, a 
housing development project or a redevelopment project, or any 
combination of those projects.  The term "project" also may be 
applied to all real and personal property, assets, cash, or 
other funds, held or used in connection with the development or 
operation of the project.  The term "project" also includes an 
interest reduction program authorized by section 12, subdivision 
7.  
    Subd. 13.  [HOUSING PROJECT.] "Housing project" means any 
work or undertaking to provide decent, safe, and sanitary 
dwellings for persons of low income and their families.  
    Such work or undertaking may include acquisition or 
provision of buildings, land, equipment, facilities, and other 
real or personal property for necessary, convenient, or 
desirable appurtenances, streets, sewers, water service, 
utilities, site preparation, landscaping, administrative, 
community, health, recreational, welfare, or other purposes.  
    "Housing project" also includes the planning of the 
buildings and improvements, the acquisition of property, the 
demolition or removal of existing structures, the construction, 
reconstruction, alteration, and repair of the improvements and 
all other work in connection therewith.  
    Subd. 14.  [REDEVELOPMENT PROJECT.] "Redevelopment project" 
means any work or undertaking:  
    (1) to acquire blighted areas and other real property for 
the purpose of removing, preventing, or reducing blight, 
blighting factors, or the causes of blight; 
    (2) to clear any areas acquired and install, construct or 
reconstruct streets, utilities, and site improvements essential 
to the preparation of sites for uses in accordance with the 
redevelopment plan; 
    (3) to sell or lease land so acquired for uses in 
accordance with the redevelopment plan; 
    (4) to prepare a redevelopment plan, and to incur 
initiation, planning, survey and other administrative costs of a 
redevelopment project, and to prepare technical and financial 
plans and arrangements for buildings, structures, and 
improvements and all other work in connection therewith; or 
    (5) to conduct an urban renewal project.  The term "urban 
renewal project" may include undertakings and activities for the 
elimination or for the prevention of the development or spread 
of slums or blighted or deteriorating areas and may involve any 
work or undertaking for that purpose constituting a 
redevelopment project or any rehabilitation or conservation 
work.  For this purpose, "rehabilitation or conservation work" 
may include (i) carrying out plans for a program of voluntary or 
compulsory repair and rehabilitation of buildings or other 
improvements; (ii) acquisition of real property and demolition, 
removal, or rehabilitation of buildings and improvements thereon 
where necessary to eliminate unhealthful, unsanitary or unsafe 
conditions, lessen density, reduce traffic hazards, eliminate 
obsolete or other uses detrimental to the public welfare, or to 
otherwise remove or prevent the spread of blight or 
deterioration, to promote historic and architectural 
preservation, or to provide land for needed public facilities; 
(iii) installation, construction, or reconstruction of streets, 
utilities, parks, playgrounds, and other improvements necessary 
for carrying out the objectives of the urban renewal project; 
(iv) the disposition, for uses in accordance with the objectives 
of the urban renewal project, of any property or part thereof 
acquired in the area of the project; provided that the 
disposition shall be in the manner prescribed in sections 1 to 
47 for the disposition of property in a redevelopment project 
area; (v) relocation within or outside the project area of 
structures that will be restored and maintained for 
architectural or historic purposes; (vi) restoration of acquired 
properties of historic or architectural value; and (vii) 
construction of foundations and platforms necessary for the 
provision of air rights sites.  
    The term "redevelopment project" also means a redevelopment 
project initiated as then provided by law and approved by the 
governing body of the city prior to July 1, 1951, as prescribed 
by Minnesota Statutes 1949, section 462.521. 
    Subd. 15.  [HOUSING DEVELOPMENT PROJECT.] "Housing 
development project" means any work or undertaking to provide 
housing for persons of moderate income and their families.  This 
work or undertaking may include the planning of building and 
improvements, the acquisition of real property which may be 
needed immediately or in the future for housing purposes, the 
construction, reconstruction, alteration and repair of new or 
existing buildings and the provisions of all equipment, 
facilities and other real or personal property for necessary, 
convenient or desirable appurtenances, streets, sewers, water 
service, utilities, site preparation, landscaping, 
administrative, community health, recreation or welfare or other 
purposes. 
    Subd. 16.  [REDEVELOPMENT PLAN.] "Redevelopment plan" means 
a plan approved by the governing body, or by an agency 
designated by the governing body for the purpose of approving 
such plans or authorized by law to do so, of each city in which 
any of a redevelopment project is to be carried out, which plan 
provides an outline for the development or redevelopment of the 
area and is sufficiently complete (1) to indicate its 
relationship to definite local objectives as to appropriate land 
uses; and (2) to indicate general land uses and general 
standards of development or redevelopment.  
    Subd. 17.  [PERSONS OF LOW INCOME AND THEIR FAMILIES.] 
"Persons of low income and their families" means persons or 
families who lack a sufficient income to enable them, without 
financial assistance, to live in decent, safe, and sanitary 
dwellings, without overcrowding.  
    Subd. 18.  [PERSONS OF MODERATE INCOME AND THEIR 
FAMILIES.] "Persons of moderate income and their families" means 
persons and families whose income is not adequate to cause 
private enterprise to provide without governmental assistance a 
substantial supply of decent, safe, and sanitary housing at 
rents or prices within their financial means.  
    Subd. 19.  [BONDS.] "Bonds" means any bonds, including 
refunding bonds, notes, interim certificates, debentures, or 
other obligations issued by an authority pursuant to sections 1 
to 47.  
    Subd. 20.  [REAL PROPERTY.] "Real property" includes all 
lands, together with improvements and fixtures thereon, and 
property of any nature appurtenant thereto, or used in 
connection therewith, and every estate, interest, and right, 
legal or equitable, therein, including terms for years.  
    Subd. 21.  [OBLIGEE OF THE AUTHORITY; OBLIGEE.] "Obligee of 
the authority" or "obligee" includes any bondholder, and the 
federal government when it is a party to any contract with the 
authority.  
    Subd. 22.  [GENERAL PLAN FOR THE DEVELOPMENT OF THE 
LOCALITY AS A WHOLE.] "General plan for the development of the 
locality as a whole" means a plan adopted by a local planning 
agency or approved by the governing body of the city 
establishing general objectives for the future use of land in a 
locality, or if no such plan has been adopted or approved, the 
general land use proposals for the development of the locality 
established from time to time by the local planning agency or by 
the governing body of the city. 
     Subd. 23.  [VETERANS.] "Veterans" has the meaning given in 
section 197.447, except as otherwise defined in a contract with 
the federal government providing for veterans' preferences, or 
as may be required by any federal law or regulation as a 
condition of federal financial assistance for a project. 
    Sec. 3.  [469.003] [CITY HOUSING AND REDEVELOPMENT 
AUTHORITY.] 
    Subdivision 1.  [PRELIMINARY CITY FINDINGS AND 
DECLARATION.] There is created in each city in this state a 
public body, corporate and politic, to be known as the housing 
and redevelopment authority in and for that city.  No such 
authority shall transact any business or exercise any powers 
until the governing body of the city shall, by resolution, find 
that in that city (1) substandard, slum, or blighted areas exist 
which cannot be redeveloped without government assistance, or 
(2) there is a shortage of decent, safe, and sanitary dwelling 
accommodations available to persons of low income and their 
families at rentals they can afford, and shall declare that 
there is need for a housing and redevelopment authority to 
function in that city.  In determining whether dwelling 
accommodations are unsafe or unsanitary, or whether substandard, 
slum, or blighted areas exist, the governing body may consider 
the degree of deterioration, obsolescence, or overcrowding, the 
percentage of land coverage, the light, air, space, and access 
available to inhabitants of the dwelling accommodations, the 
size and arrangement of rooms, the sanitary facilities, the 
extent to which conditions exist in the buildings that endanger 
life or property by fire or other causes, and the original land 
planning, lot layout, and conditions of title in the area.  
    Subd. 2.  [PUBLIC HEARING.] The governing body of a city 
shall consider such a resolution only after a public hearing is 
held on it after publication of notice in a newspaper of general 
circulation in the city at least once not less than ten days nor 
more than 30 days prior to the date of the hearing.  Opportunity 
to be heard shall be granted to all residents of the city and to 
all other interested persons.  The resolution shall be published 
in the same manner in which ordinances are published in the 
municipality.  
    Subd. 3.  [CONCLUSIVENESS OF RESOLUTION.] When the 
resolution becomes finally effective, it shall be sufficient and 
conclusive for all purposes if it declares that there is need 
for an authority and finds in substantially the terms provided 
in subdivision 1 that the conditions therein described exist.  
    Subd. 4.  [COPY FILED WITH COMMISSIONER OF ENERGY AND 
ECONOMIC DEVELOPMENT.] When the resolution becomes finally 
effective, the clerk of the city shall file a certified copy of 
it with the commissioner of energy and economic development.  In 
any suit, action, or proceeding involving the validity or 
enforcement of or relating to any contract of an authority, the 
authority shall be conclusively deemed to have become 
established and authorized to transact business and exercise its 
powers upon that filing.  Proof of the resolution and of that 
filing may be made in any such suit, action, or proceeding by a 
certificate of the commissioner of energy and economic 
development.  
    Subd. 5.  [COMMISSIONERS.] An authority shall consist of 
five commissioners, who shall be residents of the area of 
operation of the authority, who shall be appointed after the 
resolution becomes finally effective.  
    Subd. 6.  [APPOINTMENT; APPROVAL; TERM; VACANCY.] The 
commissioners shall be appointed by the mayor, with the approval 
of the governing body.  Those initially appointed shall be 
appointed for terms of one, two, three, four, and five years, 
respectively.  Thereafter all commissioners shall be appointed 
for five-year terms.  Each vacancy in an unexpired term shall be 
filled for the remainder of the term for which the original 
appointment was made.  Any member of the governing body of a 
city may be appointed and may serve as a commissioner of the 
authority for the city.  The council of any city which appoints 
members of the city council as commissioners may set the terms 
of office of the commissioner to coincide with his term of 
office as a council member. 
    Subd. 7.  [CERTIFICATE OF APPOINTMENT; FILING.] 
Commissioners shall hold office until their successors have been 
appointed and qualified.  A certificate of appointment of each 
commissioner shall be filed with the clerk and a certified copy 
shall be transmitted to the commissioner of energy and economic 
development.  A certificate so filed shall be conclusive 
evidence of appointment.  
    Sec. 4.  [469.004] [COUNTY AND MULTI-COUNTY HOUSING AND 
REDEVELOPMENT AUTHORITIES.] 
    Subdivision 1.  [PRELIMINARY COUNTY FINDINGS AND 
DECLARATION.] There is created in each county in this state 
other than Hennepin and Ramsey and other than those counties in 
which a county housing authority has been created by special 
act, a public body, corporate and politic, to be known as the 
housing and redevelopment authority of that county, hereinafter 
referred to as "county authority."  No county authority shall 
transact any business or exercise any powers until the governing 
body of the county, by resolution, finds that there is need for 
a county authority to function in the county.  The governing 
body shall consider the need for a county authority to function 
(1) on the governing body's own motion or (2) upon the filing of 
a petition signed by 25 qualified voters of the county asserting 
that there is need for a county authority to function in the 
county and requesting that the governing body so declare.  The 
governing body shall adopt a resolution declaring that there is 
need for a county authority to function in the county if it 
makes the findings required in section 3, subdivision 1. 
    Subd. 2.  [MULTI-COUNTY AUTHORITIES.] If the governing body 
of each of two or more cities or counties, or combinations of 
cities and counties, hereinafter referred to as "political 
subdivisions," by resolution declares that there is a need for 
one housing and redevelopment authority to exercise in those 
political subdivisions the powers and other functions prescribed 
for a multi-county housing and redevelopment authority, a public 
body corporate and politic to be known as a multi-county housing 
and redevelopment authority shall exist for all of those 
political subdivisions.  That authority shall exercise its 
powers and other functions in those political subdivisions in 
lieu of the authority for each such political subdivision.  
    Subd. 3.  [FINDINGS.] The governing body shall make that 
declaration if it finds (a) that substandard, slum, or 
deteriorated areas exist in the political subdivision which 
cannot be redeveloped without government assistance, or there is 
a shortage of decent, safe and sanitary dwelling accommodations 
available to persons of low income at rentals or prices they can 
afford, and (b) that a multi-county authority would be a more 
effective, efficient or economical administrative unit than the 
housing and redevelopment authority of the political subdivision 
to carry out the purposes of sections 1 to 47, in the political 
subdivision. 
    In determining whether dwelling accommodations are unsafe 
or unsanitary a governing body may take into consideration the 
factors provided in section 3. 
    Subd. 4.  [SUFFICIENCY AND CONCLUSIVENESS OF RESOLUTION.] 
When the resolution becomes finally effective, it shall be 
deemed sufficient and conclusive for all purposes if it declares 
that there is need for a county or multi-county authority and 
finds in substantially the terms provided in subdivision 3 that 
the conditions therein described exist.  
    Subd. 5.  [FUNCTION OF AUTHORITY.] A county or multi-county 
housing authority will serve, program, develop and manage all 
housing programs under its jurisdiction.  Where a county or 
multi-county authority has been established, additional city 
housing and redevelopment authorities shall not be created 
within the area of operation of the county or multi-county 
authority without the explicit concurrence of the county or 
multi-county housing and redevelopment authority and the 
commissioner of energy and economic development.  City housing 
and redevelopment authorities must petition the county or 
multi-county authority for authorization to establish a local 
housing authority and this petition must be approved by the 
commissioner of energy and economic development.  This 
subdivision does not apply if a county or multi-county authority 
has not initiated or does not have in progress an active program 
or has not applied for a public housing or redevelopment program 
from the federal government for a period of 12 months after its 
establishment.  
    Subd. 6.  [COPY FILED WITH COMMISSIONER OF ENERGY AND 
ECONOMIC DEVELOPMENT.] When the resolution becomes finally 
effective, the clerk of the political subdivision shall file a 
certified copy with the commissioner of energy and economic 
development.  The provisions of section 3, subdivision 4, 
regarding establishment of authorities apply to filings under 
this subdivision.  
    Sec. 5.  [469.005] [AREA OF OPERATION.] 
    Subdivision 1.  [COUNTY AND MULTI-COUNTY AUTHORITIES.] The 
area of operation of a county authority shall include all of the 
county for which it is created, and in case of a multi-county 
authority, it shall include all of the political subdivisions 
for which the multi-county authority is created; provided, that 
a county authority or a multi-county authority shall not 
undertake any project within the boundaries of any city which 
has not empowered the authority to function therein as provided 
in section 4 unless a resolution has been adopted by the 
governing body of the city, and by any authority which has been 
established in the city, declaring that there is a need for the 
county or multi-county authority to exercise its powers in the 
city.  
    Subd. 2.  [MULTI-COUNTY AUTHORITIES; INCREASE OR DECREASE.] 
The area of operation of a multi-county authority shall be 
increased to include one or more additional political 
subdivisions not already within a multi-county authority if the 
governing body of the additional political subdivision makes the 
findings required by section 4 and if the political subdivisions 
then included in the area of operation of the multi-county 
authority and the commissioners of the multi-county authority 
adopt a resolution declaring that the multi-county authority 
would be a more effective, efficient or economical 
administrative unit to carry out the purposes of sections 1 to 
47 if the area of operation of the multi-county authority were 
increased to include the additional political subdivision.  
    The area of operation of a multi-county authority may be 
decreased to exclude one or more political subdivisions from the 
area if the governing body of each of the political subdivisions 
in the area and the commissioners of the multi-county authority 
each adopt a resolution declaring that there is a need for 
excluding the political subdivision from the area.  No such 
action may be taken if the multi-county authority has 
outstanding any bonds involving a housing project in the 
political subdivision to be excluded unless all holders of the 
bonds consent in writing to the action.  If the action decreases 
the area of operation of the multi-county authority to only one 
political subdivision, the authority shall become a housing and 
redevelopment authority for that county or city in the same 
manner as though the authority were initially created by and 
authorized to exercise its powers in that county or city, and 
the commissioners of that authority shall be appointed as 
provided for the appointment of commissioners of a housing and 
redevelopment authority created for a county or a city. 
    The governing body of each of the political subdivisions in 
the area of operation of the multi-county authority and the 
commissioners of the multi-county authority shall adopt a 
resolution declaring that there is a need for excluding a 
political subdivision from the area if: 
    (1) each governing body of the political subdivisions to 
remain in the area of operation of the multi-county authority 
and the commissioners of the multi-county authority find that, 
because of facts arising or determined subsequent to the time 
when the area first included the political subdivision to be 
excluded, the multi-county authority would be a more effective, 
efficient or economical administrative unit for the purposes of 
sections 1 to 47 if the political subdivision were excluded from 
the area; and 
    (2) the governing body of the political subdivision to be 
excluded and the commissioners of the multi-county authority 
each find that, because of those changed facts, the purposes of 
sections 1 to 47 could be carried out more efficiently or 
economically in the political subdivision if the area of 
operation of the multi-county authority did not include the 
political subdivision. 
    Subd. 3.  [PUBLIC HEARING; NOTICE; PUBLICATION; 
RESOLUTION.] The governing body of a political subdivision shall 
not adopt any resolution authorized by this section and section 
4 unless a public hearing has been held.  The clerk of the 
political subdivision shall give notice of the time, place, and 
purpose of the public hearing not less than ten days nor more 
than 30 days prior to the day on which the hearing is to be 
held, in a manner appropriate to inform the public.  Upon the 
date fixed for the public hearing, an opportunity to be heard 
shall be granted to all residents of the political subdivision 
and to all other interested persons.  
    Subd. 4.  [CONTINUATION OF ACTIVE CITY AUTHORITIES.] Active 
city authorities established on or before June 30, 1971, will 
continue to function and operate under the provisions of 
sections 1 to 47.  An "active city authority" means an authority 
that (1) has been legally formulated and a resolution for which 
has been filed with the commissioner of energy and economic 
development and (2) has an active program or proof of an 
application for a public housing or redevelopment program 
received by the federal government on or before June 30, 1971.  
    Sec. 6.  [469.006] [APPOINTMENT, QUALIFICATIONS AND TENURE 
OF COMMISSIONERS.] 
    Subdivision 1.  [COUNTY COMMISSIONERS.] When the governing 
body of a county adopts a resolution under section 4, the 
governing body shall appoint five persons as commissioners of 
the county authority.  The membership of the commission will 
reflect an areawide distribution on a representative basis.  The 
commissioners who are first appointed shall be designated to 
serve for terms of one, two, three, four and five years 
respectively, from the date of their appointment.  Thereafter 
commissioners shall be appointed for a term of office of five 
years except that all vacancies shall be filled for the 
unexpired term.  Persons may be appointed as commissioners if 
they reside within the boundaries or area, and are otherwise 
eligible for the appointments under sections 1 to 47. 
    Subd. 2.  [MULTI-COUNTY COMMISSIONERS.] The governing body 
in the case of a county, and the mayor with the approval of the 
governing body in the case of a city, of each political 
subdivision included in a multi-county authority shall appoint 
one person as a commissioner of the authority at or after the 
time of the adoption of the resolution establishing the 
authority. 
    In the case of a multi-county authority comprising only two 
or three political subdivisions, the appointing authorities of 
the participating political subdivisions shall each appoint one 
additional commissioner whose term of office shall be as 
provided for a commissioner of a multi-county authority.  If the 
number of participants in the authority is increased to more 
than three due to the subsequent addition of political 
subdivisions, the appointments of the additional commissioners 
shall be vacated.  
    When the area of operation of a multi-county authority is 
increased to include an additional political subdivision, the 
appointing authority of each additional political subdivision 
shall appoint one or, if appropriate, two commissioners of the 
multi-county authority.  
    The appointing authority of each political subdivision 
shall appoint the successors of the commissioner appointed by 
it.  The commissioners of a multi-county authority shall be 
appointed for terms of five years except that all vacancies 
shall be filled for the unexpired terms. 
    Subd. 3.  [CERTIFICATES OF APPOINTMENT.] A certified copy 
of the certificate of appointment of each commissioner shall be 
filed with the commissioner of energy and economic development. 
    Sec. 7.  [469.007] [POWERS OF COUNTY AND MULTI-COUNTY 
AUTHORITIES.] 
    A county or multi-county authority and its commissioners 
shall, within the area of operation of the authority, have the 
same functions, rights, powers, duties, privileges, immunities 
and limitations as are provided for housing and redevelopment 
authorities created for cities, and for the commissioners of 
those authorities.  The provisions of law applicable to housing 
and redevelopment authorities created for cities and their 
commissioners shall be applicable to county and multi-county 
authorities and their commissioners, except as clearly indicated 
otherwise.  
    Sec. 8.  [469.008] [EFFECT UPON CITY HOUSING AND 
REDEVELOPMENT AUTHORITIES.] 
    Nothing in sections 4 to 8 shall alter or impair the powers 
and obligations of city housing and redevelopment authorities 
created under Minnesota Statutes 1969, chapter 462, prior to 
June 8, 1971, nor shall the area of operation of such city 
authority be included within the area of operation of a county 
or multi-county authority created pursuant to sections 4 to 8.  
With the consent of the board of commissioners of a city 
authority and the governing body of the city, a city authority 
may become a part of a county or multi-county authority upon 
assumption by the authority of the obligations of the city 
authority.  
    Sec. 9.  [469.009] [CONFLICT OF INTEREST; PENALTIES FOR 
FAILURE TO DISCLOSE.] 
    Subdivision 1.  [DISCLOSURE.] Before taking an action or 
making a decision which could substantially affect the 
commissioner's or an employee's financial interests or those of 
an organization with which the commissioner or an employee is 
associated, a commissioner or employee of an authority shall (a) 
prepare a written statement describing the matter requiring 
action or decision and the nature of the potential conflict of 
interest and (b) submit the statement to the commissioners of 
the authority.  The disclosure shall be entered upon the minutes 
of the authority at its next meeting.  The disclosure statement 
must be submitted no later than one week after the employee or 
commissioner becomes aware of the potential conflict of 
interest.  However, no disclosure statement is required if the 
effect on the commissioner or employee of the decision or act 
will be no greater than on other members of the business, 
profession or occupation or if the effect on the organization 
with which the commissioner or employee is affiliated is 
indirect, remote and insubstantial.  A potential conflict of 
interest is present if the commissioner or employee knows or has 
reason to know that the organization with which the commissioner 
or employee is affiliated is or is reasonably likely to become a 
participant in a project or development which will be affected 
by the action or decision.  Any individual who knowingly fails 
to submit a statement required by this subdivision or submits a 
statement which the individual knows contains false information 
or omits required information is guilty of a gross misdemeanor. 
    Subd. 2.  [EFFECT OF DISCLOSURE.] If an employee has a 
potential conflict of interest, the employee's superior shall 
immediately assign the matter to another employee who does not 
have a potential conflict of interest.  A commissioner who has a 
potential conflict of interest shall not attempt to influence an 
employee in any matter related to the action or decision in 
question, shall not take part in the action or decision, and 
shall not be counted toward a quorum during the portion of any 
meeting of the authority in which the action or decision is to 
be considered.  Any individual who knowingly violates this 
subdivision is guilty of a gross misdemeanor.  
    Subd. 3.  [CONFLICTS FORBIDDEN.] A commissioner or employee 
of an authority who knowingly takes part in any manner in making 
any sale, lease, or contract in the commissioner's or employee's 
official capacity in which the commissioner or employee has a 
personal financial interest is guilty of a gross misdemeanor.  
    Subd. 4.  [AGENT OR ATTORNEY.] For one year after 
termination of a position as a commissioner or employee of an 
authority, no former commissioner or former employee of an 
authority shall appear personally before any court or 
governmental department or agency as agent or attorney for 
anyone other than the authority in connection with any 
proceeding, application, request for ruling or other 
determination, contract, claim, controversy, charge, accusation, 
arrest, or other particular matter in which the authority is 
substantially interested, and with respect to which the 
commissioner or employee took any action or made any decision as 
a commissioner or employee of the authority at any time within a 
period of one year prior to the termination of that position.  
    Subd. 5.  [LIMITATIONS.] With respect to each program 
established by the authority to provide financial assistance or 
financing for real property other than rental assistance 
programs, an employee or commissioner may receive such financial 
assistance or financing not more than once.  
    Subd. 6.  [INJUNCTION.] The county attorney may seek an 
injunction in the district court to enforce the provisions of 
this section.  
    Sec. 10.  [469.010] [REMOVAL; HEARING; NOTICE.] 
    For inefficiency or neglect of duty, or misconduct in 
office, a commissioner may be removed by the governing body of 
the municipality.  The commissioner must be given a copy of the 
charges at least ten days prior to a hearing at which the 
commissioner has an opportunity to be heard in person or by 
counsel.  When charges in writing have been preferred against a 
commissioner, pending final action thereon the governing body 
may temporarily suspend the commissioner.  If it is found that 
those charges have not been substantiated, the commissioner 
shall immediately be reinstated in office.  When any 
commissioner is removed, a record of the proceedings, together 
with the charges and findings thereon, shall be filed in the 
office of the clerk.  
    Sec. 11.  [469.011] [AUTHORITY OPERATIONS.] 
    Subdivision 1.  [POWERS IN COMMISSIONERS; QUORUM.] The 
powers of each authority shall be vested in its commissioners in 
office at any time; a majority of whom shall constitute a quorum 
for all purposes.  
    Subd. 2.  [OFFICERS; BYLAWS.] Each authority shall select a 
chairman and a secretary from among its commissioners and shall 
adopt bylaws and other rules for the conduct of its affairs that 
it deems appropriate.  
    Subd. 3.  [MEETINGS.] The regular meetings of an authority 
shall be held in a fixed place, except that meetings of a 
multi-county authority may be held anywhere within the 
boundaries of the area of operation of the authority or within 
any additional area where the authority is authorized to 
undertake a project, and shall be open to the public.  
    Subd. 4.  [EXPENSES; COMPENSATION.] Each commissioner may 
receive necessary expenses, including traveling expenses, 
incurred in the performance of his duties.  Each commissioner 
may be paid $35 for attending each regular and special meeting 
of the authority.  The aggregate of all payments to each 
commissioner for any one year shall not exceed $2,500.  
    Sec. 12.  [469.012] [POWERS, DUTIES.] 
    Subdivision 1.  [SCHEDULE OF POWERS.] An authority shall be 
a public body corporate and politic and shall have all the 
powers necessary or convenient to carry out the purposes of 
sections 1 to 47, except that the power to levy and collect 
taxes or special assessments is limited to the power provided in 
sections 27 to 33.  Its powers include the following powers in 
addition to others granted in sections 1 to 47: 
    (1) to sue and be sued; to have a seal, which shall be 
judicially noticed, and to alter it; to have perpetual 
succession; and to make, amend, and repeal rules consistent with 
sections 1 to 47; 
    (2) to employ an executive director, technical experts, and 
officers, agents, and employees, permanent and temporary, that 
it requires, and determine their qualifications, duties, and 
compensation; for legal services it requires, to call upon the 
chief law officer of the city or to employ its own counsel and 
legal staff; so far as practicable, to use the services of local 
public bodies in its area of operation, provided that those 
local public bodies, if requested, shall make the services 
available; 
    (3) to delegate to one or more of its agents or employees 
the powers or duties it deems proper; 
    (4) within its area of operation, to undertake, prepare, 
carry out, and operate projects and to provide for the 
construction, reconstruction, improvement, extension, 
alteration, or repair of any project or part thereof; 
    (5) subject to the provisions of section 26, to give, sell, 
transfer, convey, or otherwise dispose of real or personal 
property or any interest therein and to execute leases, deeds, 
conveyances, negotiable instruments, purchase agreements, and 
other contracts or instruments, and take action, that is 
necessary or convenient to carry out the purposes of these 
sections; 
    (6) within its area of operation, to acquire real or 
personal property or any interest therein by gifts, grant, 
purchase, exchange, lease, transfer, bequest, devise, or 
otherwise, and by the exercise of the power of eminent domain, 
in the manner provided by chapter 117, to acquire real property 
which it may deem necessary for its purposes, after the adoption 
by it of a resolution declaring that the acquisition of the real 
property is necessary to eliminate one or more of the conditions 
found to exist in the resolution adopted pursuant to section 3 
or to provide decent, safe, and sanitary housing for persons of 
low and moderate income, or is necessary to carry out a 
redevelopment project.  Real property needed or convenient for a 
project may be acquired by the authority for the project by 
condemnation pursuant to this section.  This includes any 
property devoted to a public use, whether or not held in trust, 
notwithstanding that the property may have been previously 
acquired by condemnation or is owned by a public utility 
corporation, because the public use in conformity with the 
provisions of sections 1 to 47 shall be deemed a superior public 
use.  Property devoted to a public use may be so acquired only 
if the governing body of the municipality has approved its 
acquisition by the authority.  An award of compensation shall 
not be increased by reason of any increase in the value of the 
real property caused by the assembly, clearance or 
reconstruction, or proposed assembly, clearance or 
reconstruction for the purposes of sections 1 to 47 of the real 
property in an area;  
    (7) within its area of operation, and without the adoption 
of an urban renewal plan, to acquire, by all means as set forth 
in clause (6) but without the adoption of a resolution provided 
for in clause (6), real property, and to demolish, remove, 
rehabilitate or reconstruct the buildings and improvements or 
construct new buildings and improvements thereon, or to so 
provide through other means as set forth in Laws 1974, chapter 
228, or to grade, fill and construct foundations or otherwise 
prepare the site for improvements.  The authority may dispose of 
the property pursuant to section 29, provided that the 
provisions of section 29 requiring conformance to an urban 
renewal plan shall not apply.  The authority may finance these 
activities by means of the redevelopment project fund or by 
means of tax increments or tax increment bonds or by the methods 
of financing provided for in section 33 or by means of 
contributions from the municipality provided for in section 41, 
clause (9), or by any combination of those means.  Real property 
with buildings or improvements thereon shall only be acquired 
under this clause when the buildings or improvements are 
substandard.  The exercise of the power of eminent domain under 
this clause shall be limited to real property which contains 
buildings and improvements which are vacated and substandard.  
For the purpose of this clause, substandard buildings or 
improvements mean buildings or improvements that are dilapidated 
or obsolescent, faultily designed, lack adequate ventilation, 
light, or sanitary facilities, or any combination of these or 
other factors that are detrimental to the safety or health of 
the community; 
    (8) within its area of operation, to determine the level of 
income constituting low or moderate family income.  The 
authority may establish various income levels for various family 
sizes.  In making its determination, the authority may consider 
income levels that may be established by the federal housing 
administration or a similar or successor federal agency for the 
purpose of federal loan guarantees or subsidies for persons of 
low or moderate income.  The authority may use that 
determination as a basis for the maximum amount of income for 
admissions to housing development projects or housing projects 
owned or operated by it; 
    (9) to provide in federally assisted projects any 
relocation payments and assistance necessary to comply with the 
requirements of the Federal Uniform Relocation Assistance and 
Real Property Acquisition Policies Act of 1970, and any 
amendments or supplements thereto; 
    (10) to make, or agree to make, payments in lieu of taxes 
to the city or the county, the state or any political 
subdivision thereof, that it finds consistent with the purposes 
of sections 1 to 47; 
    (11) to cooperate with or act as agent for the federal 
government, the state or any state public body, or any agency or 
instrumentality of the foregoing, in carrying out any of the 
provisions of sections 1 to 47 or of any other related federal, 
state or local legislation; and upon the consent of the 
governing body of the city to purchase, lease, manage, or 
otherwise take over any housing project already owned and 
operated by the federal government; 
    (12) to make plans for carrying out a program of voluntary 
repair and rehabilitation of buildings and improvements, and 
plans for the enforcement of laws, codes, and regulations 
relating to the use of land and the use and occupancy of 
buildings and improvements, and to the compulsory repair, 
rehabilitation, demolition, or removal of buildings and 
improvements.  The authority may develop, test, and report 
methods and techniques, and carry out demonstrations and other 
activities for the prevention and elimination of slums and 
blight; 
    (13) to borrow money or other property and accept 
contributions, grants, gifts, services, or other assistance from 
the federal government, the state government, state public 
bodies, or from any other public or private sources; 
    (14) to include in any contract for financial assistance 
with the federal government any conditions that the federal 
government may attach to its financial aid of a project, not 
inconsistent with purposes of sections 1 to 47, including 
obligating itself (which obligation shall be specifically 
enforceable and not constitute a mortgage, notwithstanding any 
other laws) to convey to the federal government the project to 
which the contract relates upon the occurrence of a substantial 
default with respect to the covenants or conditions to which the 
authority is subject; to provide in the contract that, in case 
of such conveyance, the federal government may complete, 
operate, manage, lease, convey or otherwise deal with the 
project until the defaults are cured if the federal government 
agrees in the contract to re-convey to the authority the project 
as then constituted when the defaults have been cured; 
    (15) to issue bonds for any of its corporate purposes and 
to secure the bonds by mortgages upon property held or to be 
held by it or by pledge of its revenues, including grants or 
contributions; 
    (16) to invest any funds held in reserves or sinking funds, 
or any funds not required for immediate disbursement, in 
property or securities in which savings banks may legally invest 
funds subject to their control; 
    (17) within its area of operation, to determine where 
blight exists or where there is unsafe, unsanitary, or 
overcrowded housing;  
    (18) to carry out studies of the housing and redevelopment 
needs within its area of operation and of the meeting of those 
needs.  This includes study of data on population and family 
groups and their distribution according to income groups, the 
amount and quality of available housing and its distribution 
according to rentals and sales prices, employment, wages, 
desirable patterns for land use and community growth, and other 
factors affecting the local housing and redevelopment needs and 
the meeting of those needs; to make the results of those studies 
and analyses available to the public and to building, housing 
and supply industries; 
    (19) if a local public body does not have a planning agency 
or the planning agency has not produced a comprehensive or 
general community development plan, to make or cause to be made 
a plan to be used as a guide in the more detailed planning of 
housing and redevelopment areas; 
    (20) to lease or rent any dwellings, accommodations, lands, 
buildings, structures, or facilities included in any project 
and, subject to the limitations contained in sections 1 to 47 
with respect to the rental of dwellings in housing projects, to 
establish and revise the rents or charges therefor; 
    (21) to own, hold, and improve real or personal property 
and to sell, lease, exchange, transfer, assign, pledge, or 
dispose of any real or personal property or any interest therein;
    (22) to insure or provide for the insurance of any real or 
personal property or operations of the authority against any 
risks or hazards; 
    (23) to procure or agree to the procurement of government 
insurance or guarantees of the payment of any bonds or parts 
thereof issued by an authority and to pay premiums on the 
insurance; 
    (24) to make expenditures necessary to carry out the 
purposes of sections 1 to 47; 
    (25) to enter into an agreement or agreements with any 
state public body to provide informational service and 
relocation assistance to families, individuals, business 
concerns and nonprofit organizations displaced or to be 
displaced by the activities of any state public body; 
    (26) to compile and maintain a catalog of all vacant, open 
and undeveloped land, or land which contains substandard 
buildings and improvements as that term is defined in clause 
(7), that is owned or controlled by the authority or by the 
governing body within its area of operation and to compile and 
maintain a catalog of all authority owned real property that is 
in excess of the foreseeable needs of the authority, in order to 
determine and recommend if the real property compiled in either 
catalog is appropriate for disposal pursuant to the provisions 
of section 29, subdivisions 9 and 10; 
    (27) to recommend to the city concerning the enforcement of 
the applicable health, housing, building, fire prevention and 
housing maintenance code requirements as they relate to 
residential dwelling structures that are being rehabilitated by 
low or moderate income persons pursuant to section 29, 
subdivision 9 for the period of time necessary to complete the 
rehabilitation, as determined by the authority; and 
    (28) to recommend to the city the initiation of municipal 
powers, against certain real properties, relating to repair, 
closing, condemnation, or demolition of unsafe, unsanitary, 
hazardous, and unfit buildings, as provided in section 41, 
clause (5). 
    Subd. 3.  [EXERCISE OF POWERS.] An authority may exercise 
all or any part or combination of the powers granted by sections 
1 to 47 within its area of operation.  Any two or more 
authorities may join with one another in the exercise, either 
jointly or otherwise, of any or all of their powers for the 
purpose of financing, including the issuance of bonds and giving 
security therefor, planning, undertaking, owning, constructing, 
operating, or contracting with respect to a housing project 
located within the area of operation of any one or more of the 
authorities.  For that purpose an authority may by resolution 
prescribe and authorize any other housing authority, so joining 
with it, to act on its behalf with respect to any or all powers, 
as its agent or otherwise, in the name of the authority so 
joining or in its own name. 
    A county or city may join with any authority to permit the 
authority, on behalf of the county or city, to plan, undertake, 
administer, and carry out a leased existing housing assistance 
payments program, pursuant to section 8 of the United States 
Housing Act of 1937 as amended, 42 United States Code, section 
1437 f.  A city may so join with an authority unless there is an 
authority in the city which has been authorized by resolution 
under section 3 to transact business or exercise powers.  A 
county may so join with an authority unless (a) there is a 
county authority which has been authorized by resolution under 
section 4 to exercise powers, or the county is a member of a 
multicounty authority, and (b) the authority has initiated or 
has in progress an active program or has applied for federal 
assistance in a public housing or redevelopment program within 
12 months after its establishment. 
    Subd. 4.  [SUBJECT TO LAWS OF LOCALITY.] All projects shall 
be subject to the planning, zoning, sanitary, and building laws, 
ordinances, and regulations applicable to the locality in which 
the project is situated.  
     Subd. 4a.  [VETERANS' PREFERENCES.] An authority may 
include in any contract with the federal government provision 
for veterans' and service persons' preferences that may be 
required by any federal law or regulation as a condition of 
federal financial assistance for a project. 
    Subd. 5.  [PAPERS SENT TO COMMISSIONER.] Each authority 
shall transmit to the commissioner of energy and economic 
development certified copies of (1) any application to the 
federal government for financial assistance; (2) any proposed 
contract with the federal government; (3) the urban 
redevelopment plan and the urban redevelopment project documents 
specified in sections 27, 28, and 29, and the annual urban 
redevelopment budget; (4) the low-rent public housing 
development program and the plans and layout, specifications and 
drawings therefor including estimated cost, proposed method of 
financing, and detailed estimates of expenses and revenues 
thereof; (5) the low-rent public housing management program and 
the annual or periodical management budget therefor, and 
amendments of those documents, together with supporting data 
requested by the commissioner.  
    Upon examination of the documents, the commissioner of 
energy and economic development may make suggestions to the 
authority upon the matters to which the documents relate, and 
may make the suggestions public.  The commissioner of energy and 
economic development shall act in an advisory capacity and 
nothing done by the commissioner under the provisions of this 
subdivision shall affect the validity of any action of the 
authority.  
    Subd. 6.  [REHABILITATION LOANS AND GRANTS.] An authority 
may develop and administer a housing rehabilitation loan and 
grant program with respect to property located anywhere within 
its boundaries which is owned by persons of low and moderate 
income, on the terms and conditions it determines. 
    Subd. 7.  [INTEREST REDUCTION PROGRAM.] An authority may 
develop and administer an interest reduction program to assist 
the financing of the construction, rehabilitation, and purchase 
of housing units which are intended primarily for occupancy by 
individuals of low or moderate income and related and 
subordinate facilities.  An authority may:  
    (1) pay in periodic payments or in a lump sum payment any 
or all of the interest on loans made pursuant to chapter 462C or 
subdivision 6;  
    (2) pay any or all of the interest on bonds issued pursuant 
to chapter 462C, or pursuant to sections 1 to 47 for the purpose 
of making loans authorized by subdivision 6;  
    (3) pay in periodic payments or in a lump sum payment any 
or all of the interest on loans made by private lenders to 
purchasers of housing units;  
    (4) pay any or all of the interest due on loans made by 
private lenders to a developer for the construction or 
rehabilitation of housing units;  
    (5) pay in periodic payments or in a lump sum payment any 
or all of the interest on loans made by any person to a 
developer for the construction, rehabilitation, and purchase of 
commercial facilities which are related and subordinate to the 
construction, rehabilitation, or purchase of housing units that 
receive interest reduction assistance provided that the entire 
development is composed primarily of housing units;  
    (6) pay any or all of the interest on bonds issued pursuant 
to sections 153 to 166, when the bonds are issued for a project 
that is related and subordinate to the construction, 
rehabilitation, or purchase of housing units that receive 
interest reduction assistance provided that the entire 
development is composed primarily of housing units;  
    (7) pay in periodic payments or in a lump sum payment any 
or all of the interest on loans made pursuant to section 185 for 
the rehabilitation or preservation of small and medium sized 
commercial buildings; and 
    (8) pay any or all of the interest on bonds issued pursuant 
to section 185.  
    Subd. 8.  [INTEREST REDUCTION PROGRAM; LIMITATIONS.] In 
developing the interest reduction program authorized by 
subdivision 7 the authority shall consider:  
    (1) the availability and affordability of other 
governmental programs;  
    (2) the availability and affordability of private market 
financing; and 
    (3) the need for additional affordable mortgage credit to 
encourage the construction and enable the purchase of housing 
units within the jurisdiction of the authority.  
    The authority shall adopt rules for the interest reduction 
program.  Interest reduction assistance shall not be provided if 
the authority determines that financing for the purchase of a 
housing unit or for the construction or rehabilitation of 
housing units is otherwise available from private lenders upon 
terms and conditions that are affordable by the applicant, as 
provided by the authority in its rules.  
    For the purposes of this subdivision an "assisted housing 
unit" is a housing unit which is rented or to be rented and 
which is a part of a rental housing development where the 
financing for the rental housing development is assisted with 
interest reduction assistance provided by the authority during 
the calendar year.  If interest reduction assistance is provided 
for construction period interest for a rental housing 
development, the housing units in the housing development shall 
be considered assisted housing units for a period after 
occupancy of the housing units which is equal to the period 
during which interest reduction assistance is provided to assist 
the construction financing of the rental housing development.  
In any calendar year when an authority provides interest 
reduction assistance for assisted housing units (1) at least 20 
percent of the total assisted housing units within the 
jurisdiction of the authority shall be held available for rental 
to families or individuals with an adjusted gross income which 
is equal to or less than 80 percent of the median family income, 
and (2) at least an additional 55 percent of the total assisted 
housing units within the jurisdiction of the authority shall be 
held available for rental to individuals or families with an 
annual adjusted gross income which is equal to or less than 66 
times 120 percent of the monthly fair market rent for the unit 
established by the United States department of housing and urban 
development.  At least 80 percent of the aggregate dollar amount 
of funds appropriated by an authority within any calendar year 
to provide interest reduction assistance for financing of 
construction, rehabilitation or purchase of single family 
housing, as that term is defined in section 462C.02, subdivision 
4, shall be appropriated for housing units that are to be sold 
to or occupied by families or individuals with an adjusted gross 
income which is equal to or less than 110 percent of median 
family income.  For the purposes of this subdivision, "median 
family income" means the median family income established by the 
United States department of housing and urban development for 
the nonmetropolitan county or the standard metropolitan 
statistical area, as the case may be.  The adjusted gross income 
may be adjusted by the authority for family size.  The 
limitations imposed upon assisted housing units by this 
subdivision do not apply to interest reduction assistance for a 
rental housing development located in a targeted area as defined 
in section 462C.02.  An authority that establishes a program 
pursuant to this subdivision shall by January 2 each year report 
to the commissioner of energy and economic development a 
description of the program established and a description of the 
recipients of interest reduction assistance.  
    Subd. 9.  [INTEREST REDUCTION PROGRAM; REQUIRED 
AGREEMENTS.] (a) Under any interest reduction program authorized 
by subdivision 7, which provides interest reduction assistance 
pursuant to clauses (1) to (6), the authority shall obtain an 
agreement from the developer or other benefited owner of the 
property.  The agreement shall provide that, upon the benefited 
owner's sale or transfer of the property, the authority shall be 
paid in an amount determined under paragraph (b) and that this 
obligation is secured by an interest in the property.  The 
interest in the property shall consist of either a right of 
co-ownership or a lien or mortgage against the property and may 
be subordinate to other interests in the property.  For purposes 
of this subdivision, "property" means property the construction, 
acquisition or improvement of which is financed in whole or part 
with the proceeds of a loan upon which the interest payments are 
reduced under an interest reduction program.  
    (b)(i) The amount required to be paid to the authority 
under paragraph (a) shall equal at least 
    (A) the sale price of the property, less 
    (B) the downpayment, any payments of principal, other 
payments made to construct, acquire or improve the property and 
any outstanding liens or mortgages securing loans, advances, or 
goods and services provided for the construction, acquisition or 
improvement of the property, less 
    (C) the amount, if any, which the authority determines 
should be allowed for the developer or other benefited property 
owner as a return on the developer's or other benefited property 
owner's investment in the property, multiplied by 
    (D) a fraction, the numerator of which is the interest 
reduction payments made by the authority and the denominator of 
which is the total of the downpayment, all principal and 
interest payments including any portion paid by the authority, 
and other payments made to construct, acquire or improve the 
property.  In the case of a transfer, other than an arms-length 
sale, an appraisal shall be substituted for the sale price.  
    (ii) If the interest reduction payments are made for a bond 
issue, or other obligation, the proceeds of which are lent to 
five or more purchasers of separate housing units, the fraction 
under clause (b)(i)(D) may be determined on the basis of an 
estimate of the aggregate factors for all the borrowers of the 
proceeds, of the bonds or other obligations participating in the 
interest reduction program.  
    The provisions of this subdivision shall not apply to 
interest reduction assistance provided for construction period 
interest for housing units which are to be sold upon completion 
to purchasers who intend at the time of purchase to occupy the 
housing units as their principal place of residence.  
    Subd. 10.  [INTEREST REDUCTION PROGRAM.] The authority to 
authorize payment of interest reduction assistance pursuant to 
subdivisions 7, 8, and 9 shall expire on January 1, 1989. 
Interest reduction assistance payments authorized prior to 
January 1, 1989 may be paid after January 1, 1989.  
    Subd. 11.  [AUTHORITIES CREATED PURSUANT TO SPECIAL 
LAW.] Except as expressly limited by the special law 
establishing the authority, an authority created pursuant to 
special law shall have the powers granted by any statute to any 
authority created pursuant to this chapter. 
    Sec. 13.  [469.013] [ACCOUNTING.] 
    Subdivision 1.  [ANNUAL REPORTS, DUTIES OF STATE AUDITOR.] 
Each authority shall keep an accurate account of all its 
activities and of all its receipts and expenditures.  The 
authority shall annually, in January for accounts kept on a 
calendar year basis, and within 30 days of the end of its fiscal 
year for accounts kept on a fiscal year basis, make a report on 
the accounts to the commissioner of energy and economic 
development, the state auditor, and the governing body of the 
city.  The reports shall be in a form prescribed by the 
commissioner of energy and economic development.  All powers 
conferred and duties imposed upon the state auditor with respect 
to state and county officers, institutions, property and 
improvements shall also be exercised and performed by the state 
auditor with respect to authorities, except the power to 
prescribe the form of reports or accounts provided in sections 1 
to 47.  The state auditor shall make audits of the low rent 
public housing funds of the authorities that are deemed to be in 
the public interest, and shall file a written report covering 
the audits with the authority, the city clerk of the 
municipality, and the commissioner of energy and economic 
development.  The first report of the state auditor shall 
include all expenditures and activities of the local authority 
from the creation of the authority.  Each authority shall be 
liable to the state and shall pay all costs and expenses of the 
examination, from funds available for those purposes. 
    Subd. 2.  [COMMISSIONER OF ENERGY AND ECONOMIC DEVELOPMENT; 
POWERS, DUTIES.] The commissioner of energy and economic 
development may investigate the affairs of authorities and their 
dealings, transactions, and relationships.  The commissioner may 
examine the properties and records of authorities and prescribe 
methods of accounting and the rendering of periodical reports in 
relation to projects undertaken by authorities.  In prescribing 
the form of accounts the commissioner of energy and economic 
development shall take into consideration any requirements of 
the federal government under any contract with an authority.  
The commissioner of energy and economic development may adopt, 
amend, and repeal rules prescribing standards and stating 
principles governing the planning, construction, maintenance, 
and operation of projects by authorities.  Compliance with 
sections 1 to 47 and the rules adopted by the commissioner of 
energy and economic development may be enforced by the 
commissioner by a proceeding in equity. 
    Sec. 14.  [469.014] [LIABLE IN CONTRACT OR TORT.] 
    An authority shall be liable in contract or in tort in the 
same manner as a private corporation.  The commissioners of an 
authority shall not be personally liable as such on its 
contracts, or for torts not committed or directly authorized by 
them.  The property or funds of an authority shall not be 
subject to attachment, or to levy and sale on execution, but, if 
an authority refuses to pay a judgment entered against it in any 
court of competent jurisdiction, the district court for the 
county in which the authority is situated may, by writ of 
mandamus, direct the treasurer of the authority to pay the 
judgment.  
    Sec. 15.  [469.015] [LETTING OF CONTRACTS; PERFORMANCE 
BONDS.] 
    Subdivision 1.  [BIDS; NOTICE.] All construction work, and 
work of demolition or clearing, and every purchase of equipment, 
supplies, or materials, necessary in carrying out the purposes 
of sections 1 to 47, that involve expenditure of $15,000 or more 
shall be awarded by contract.  Before receiving bids the 
authority shall publish, once a week for two consecutive weeks 
in an official newspaper of general circulation in the community 
a notice that bids will be received for that construction work, 
or that purchase of equipment, supplies, or materials.  The 
notice shall state the nature of the work and the terms and 
conditions upon which the contract is to be let, naming a time 
and place where bids will be received, opened and read publicly, 
which time shall be not less than seven days after the date of 
the last publication.  After the bids have been received, opened 
and read publicly and recorded, the authority shall award the 
contract to the lowest responsible bidder, provided that the 
authority reserves the right to reject any or all bids.  Each 
contract shall be executed in writing, and the person to whom 
the contract is awarded shall give sufficient bond to the 
authority for its faithful performance.  If no satisfactory bid 
is received, the authority may readvertise.  The authority may 
establish reasonable qualifications to determine the fitness and 
responsibility of bidders and to require bidders to meet the 
qualifications before bids are accepted. 
    Subd. 2.  [EXCEPTION; EMERGENCY.] If the authority by a 
vote of four-fifths of its members shall declare that an 
emergency exists requiring the immediate purchase of any 
equipment or material or supplies at a cost in excess of $15,000 
but not exceeding $30,000, or making of emergency repairs, it 
shall not be necessary to advertise for bids, but the material, 
equipment, or supplies may be purchased in the open market at 
the lowest price obtainable, or the emergency repairs may be 
contracted for or performed without securing formal competitive 
bids.  An emergency, for purposes of this subdivision, shall be 
understood to be unforeseen circumstances or conditions which 
result in the placing in jeopardy of human life or property. 
    Subd. 3.  [PERFORMANCE BONDS.] Performance bonds shall be 
required from contractors for any works of construction as 
provided in and subject to all the provisions of sections 574.26 
to 574.31 except for contracts entered into by an authority for 
an expenditure of less than $15,000.  
    Subd. 4.  [EXCEPTION; CERTAIN PROJECTS.] An authority need 
not require either competitive bidding or performance bonds in 
the case of a contract for the acquisition of a low rent housing 
project for which financial assistance is provided by the 
federal government, and which does not require any direct loan 
or grant of money from the municipality as a condition of the 
federal financial assistance, and where the contract provides 
for the construction of such a project upon land not owned by 
the authority at the time of the contract, or owned by the 
authority for redevelopment purposes, and provides for the 
conveyance or lease to the authority of the project or 
improvements upon completion of construction.  
    Sec. 16.  [469.016] [LOW RENT HOUSING.] 
    An authority shall not initiate any low rent housing 
project, and shall not enter into any contract with respect to 
it, until (1) it has made findings, after an analysis of the 
local housing market, that (i) there is need for such low rent 
housing which cannot be met by private enterprise and (ii) a gap 
of at least 20 percent exists between the upper shelter rental 
limits for admission to the proposed low rent housing and the 
lowest shelter rents at which private enterprise is providing 
through new construction and existing structures a substantial 
supply of decent, safe and sanitary housing; and (2) the 
governing body of the municipality has by resolution affirmed 
those findings of the authority and approved the provision of 
that low rent housing project.  This subdivision shall not apply 
to any public low rent housing projects for which financial 
assistance is provided by the federal government, and which does 
not require any direct loan or grant of money from the 
municipality as a condition of a federal financial assistance.  
An authority shall not make any contract with the federal 
government for a low rent housing project unless the governing 
body of the municipality has by resolution approved the 
provision of that low rent housing project.  
    Sec. 17.  [469.017] [HOUSING DEVELOPMENT PROJECTS.] 
    Before carrying out a housing development project an 
authority must find that the project is necessary to alleviate a 
shortage of decent, safe and sanitary housing for persons of low 
or moderate income and their families as such income is 
determined by the authority.  No housing development project 
involving the use of the power of eminent domain shall be 
carried out by an authority without the prior approval of the 
governing body of the municipality in which the project is 
located.  A housing development project or any interest therein 
may be sold or leased to private developers before, during or 
after the completion of construction of improvements thereon.  
The sale or lease shall be in accordance with the provisions of 
section 29, subdivisions 2, 5 and 7, except that the provisions 
requiring conformance to a redevelopment plan shall not be 
applicable.  The sale or lease may be made for other than 
housing purposes if the authority finds that changed 
circumstances arising subsequent to the acquisition of the 
project make a sale or lease for housing purposes inappropriate. 
Nothing in this section shall limit the power of the authority 
to acquire or dispose of real property pursuant to sections 12, 
subdivision 1, clause (7), and 29, subdivisions 9 and 10, except 
that any exercise of the power of eminent domain pursuant to 
section 12, subdivision 1, clause (7), shall not be carried out 
by an authority without the prior approval of the governing body 
of the municipality in which the housing development project is 
located.  The authority shall have the power to transfer such 
real property in accordance with the provisions of sections 12, 
subdivision 1, clause (7), and 29, subdivisions 9 and 10, 
before, during or after the completion of construction, 
rehabilitation, or improvements thereon, except that the 
transfer shall be in accordance with the provisions of section 
29, subdivisions 2, 5, and 7 except as elsewhere provided in 
Laws 1974, chapter 228.  
    Sec. 18.  [469.018] [RENTALS.] 
    Subdivision 1.  [BASIS OF CHARGE.] Each authority shall 
manage and operate its housing projects in an efficient manner 
to enable it to fix the rentals or payments for dwelling 
accommodations at rates consistent with its providing decent, 
safe, and sanitary dwelling accommodations for persons of low 
income.  No authority shall construct or operate any housing 
project for profit, or as a source of revenue to the 
municipality.  An authority shall fix the rentals or payments 
for dwellings in its projects at no higher rates than it shall 
find to be necessary in order to produce revenues which, 
together with all other available moneys, revenues, income, and 
receipts of the authority, will be sufficient (1) to pay, as 
they become due, the principal and interest on the bonds of the 
authority; (2) to create and maintain reserves required to 
assure the payment of principal and interest as they become due 
on its bonds; (3) to meet the cost of, and to provide for, 
maintaining and operating the projects, including necessary 
reserves and the cost of any insurance, and the administrative 
expenses of the authority; and (4) to make payments in lieu of 
taxes that it determines are consistent with the maintenance of 
the low rent character of projects.  
    Subd. 2.  [REALTORS.] With respect to the management and 
operation of a housing project the authority may employ reliable 
real estate operators or firms or brokers or the municipality to 
perform those services for it.  No such real estate operators or 
firms or brokers or the municipality shall have any authority in 
tenant selection or the fixing of rentals.  Each authority 
employing real estate operators or firms or brokers or the 
municipality shall require the execution of a contract of 
employment stating the terms and conditions under which the 
services are to be performed, which shall be subject to the 
approval of the commissioner of energy and economic development. 
    Sec. 19.  [469.019] [RENTALS, TENANT ADMISSIONS.] 
    In the operation or management of housing projects an 
authority shall observe the following duties with respect to 
rentals and tenant admissions. 
    (a) It may rent or lease the dwelling accommodations only 
to persons of low income and at rentals within their ability to 
pay. 
    (b) It may rent or lease to a tenant dwelling 
accommodations consisting of the number of rooms it deems 
necessary to provide safe and sanitary accommodations to the 
proposed occupants, without overcrowding, but no greater number. 
     (c) It shall not approve a family as tenant in a housing 
project if the family has an aggregate annual net income from 
all sources at the time of admission which exceeds five times 
the annual rental for the accommodations to be provided the 
family.  As used in this section, aggregate annual net income 
shall not include: 
    (1) the income of a family member, other than the head of 
the household or his spouse, who is under 18 years of age or who 
is a full time student; 
    (2) the first $300 of the income of a secondary wage earner 
who is the spouse of the head of the household; 
    (3) $300 for each member of the family residing in the 
household, other than the head of the household or his spouse, 
who is under 18 years of age or who is 18 years of age or older 
and is disabled, handicapped or a full time student; 
    (4) nonrecurring income as defined by the authority; 
    (5) five percent of the family's gross income from all 
sources or, in the case of an elderly family, ten percent of the 
family's gross income; 
    (6) amounts paid or incurred for which the family is liable 
for extraordinary medical expenses or other expenses resulting 
from unusual circumstances as determined by the authority; and 
    (7) an amount equal to the money received by the head of 
the household or his spouse from or under the direction of any 
public or private nonprofit child placing agency for the care 
and maintenance of one or more persons who are under 18 years of 
age and were placed in the family by that agency. 
    (d) In computing the rental for the purpose of this 
section, there shall be included in the rental the average 
annual cost, as determined by the authority, to occupants of 
heat, water, electricity, gas, cooking fuel, and other necessary 
services or facilities, whether or not the charge for the 
services and facilities is included in the rental.  An authority 
may adopt as its maximum net income for admission of families 
any maximum which is less than either:  (1) the maximum net 
family income computed under this section; or (2) the maximum 
net family income determined pursuant to section 22; or (3) the 
maximum net family income determined pursuant to the housing and 
community development act of 1974. 
    Sec. 20.  [469.020] [DISCRIMINATION PROHIBITED, DISPLACED 
FAMILIES.] 
    There shall be no discrimination in the selection of 
tenants because of race or religious, political, or other 
affiliations, but, if the number of qualified applicants for 
dwelling accommodations exceeds the dwelling units available, 
preference shall be given to inhabitants of the municipality in 
which the project is located, and to the families who occupied 
the dwellings eliminated by demolition, condemnation, and 
effective closing as part of the project, as far as is 
reasonably practicable without discrimination against families 
living in other substandard areas within the same municipality.  
    Sec. 21.  [469.021] [PREFERENCES.] 
    As between applicants equally in need and eligible for 
occupancy of a dwelling and at the rent involved, preference 
shall be given to families of service persons who died in 
service and to families of veterans.  In admitting families of 
low income to dwelling accommodations in any housing project an 
authority shall, as far as is reasonably practicable, give 
consideration to applications from families to which aid for 
dependent children is payable, and to resident families to whom 
public assistance or supplemental security income for the aged, 
blind and disabled is payable, when those families are otherwise 
eligible.  
    Sec. 22.  [469.022] [ESTABLISHMENT OF INCOME RESTRICTION.] 
    The dwellings in public low-rent housing shall be available 
solely for families whose net family income does not exceed the 
maximum net family income falling within the lowest 20 percent 
by number of all family incomes in the area of operation as such 
maximum net family income has been determined by the authority.  
Each year, this restriction shall be re-examined by the 
commissioner of energy and economic development, and a public 
hearing shall be held by the commissioner of energy and economic 
development to determine whether administrative or interpretive 
difficulties or unsatisfactory progress in the provision of 
low-rent housing or redevelopment require a modification of that 
income restriction.  Upon the conclusion of that hearing, the 
commissioner of energy and economic development shall modify the 
restriction set out in this section to the extent required to 
make satisfactory progress in the provision of low-rent housing 
or redevelopment.  
    Sec. 23.  [469.023] [PERIODIC INVESTIGATION OF TENANT.] 
    An authority shall make periodic investigations of each 
family admitted to a low-rent housing project and, on the basis 
of the investigations, shall determine whether that family at 
the time of its admission (1) lived in an unsafe, unsanitary, or 
overcrowded dwelling or had been displaced by a project or by 
off-site elimination in compliance with the equivalent 
elimination requirement hereof, or actually was without housing, 
or was about to be without housing as a result of a court order 
of eviction, due to causes other than the fault of the tenant, 
and (2) had a net family income not exceeding the income limits 
for admission of families of low income to the housing; provided 
that the requirement in clause (1) shall not be applicable in 
the case of the family of any veteran who has been discharged, 
other than dishonorably, from, or the family of any service 
person who died in, the armed forces of the United States, if 
that family had made application for admission to the project 
within any time limit specified by federal law applicable to 
federal financial assistance for the project.  If it is found 
upon investigation that the net income of any families have 
increased beyond the maximum income limits fixed pursuant to 
section 22 for continued occupancy in the housing, those 
families shall be required to move from the project.  
    Sec. 24.  [469.024] [POWER OF AUTHORITY.] 
    Nothing contained in sections 16 to 24 shall be construed 
as limiting the power of an authority (1) with respect to a 
housing project to vest in an obligee the right, in the event of 
a default by the authority, to take possession or cause the 
appointment of a receiver of the project, free from the 
restrictions imposed by this section or section 23; or (2) with 
respect to a redevelopment project, in the event of a default by 
a purchaser or lessee of land, to acquire property and operate 
it free from such restrictions. 
    Sec. 25.  [469.025] [DEMOLITION OF UNSAFE OR UNSANITARY 
BUILDINGS.] 
    No project for low-rent housing or the clearance of a 
blighted area involving the construction of new dwellings shall 
be undertaken by a housing authority unless, subsequent to the 
initiation of the project, there has been or will be elimination 
by demolition, condemnation and effective closing, or compulsory 
repair, of unsafe or unsanitary buildings situated in the area 
of operation substantially equal in number to the number of 
dwelling units provided by the project.  The elimination may, 
upon approval by the commissioner of energy and economic 
development, be deferred for a period determined by the 
commissioner if the shortage of decent, safe, or sanitary 
housing available to families of low income is so acute as to 
force dangerous overcrowding of those families.  
    Sec. 26.  [469.026] [EXISTING BUILDINGS; ACQUISITION, 
REPAIR.] 
    An authority may purchase, lease, or otherwise acquire 
existing buildings for rehabilitation into low-rent housing.  
The provisions of sections 1 to 47 relating to other low-rent 
housing projects shall apply to the projects.  Before proceeding 
with the project, an authority shall make an analysis 
demonstrating: 
    (1) the buildings to be acquired or leased shall be in such 
condition that it is feasible to remodel, repair, or reconstruct 
them and that the buildings, when rehabilitated will provide 
decent, safe, and sanitary housing; 
    (2) the rehabilitation of the buildings comprising the 
project will prevent or arrest the spread of blight so as to 
protect the neighborhood in which the buildings are located; and 
    (3) the rehabilitated buildings will provide low-rent 
housing, will help to conserve the existing housing supply, and 
will otherwise accomplish the purposes of sections 1 to 47. 
    Nothing in this section shall limit the powers of an 
authority with respect to a redevelopment project. 
    Sec. 27.  [469.027] [REDEVELOPMENT PLAN.] 
    Any person may submit a redevelopment plan to an authority, 
or an authority may consider a redevelopment plan on its own 
initiative.  An authority shall immediately transmit the plan to 
the planning agency of the city in which the area to be 
redeveloped is situated, for its study, or, if no planning 
agency exists, the plan shall be submitted to an agency 
indicated by the governing body of the city.  An authority shall 
request the written opinion of the planning or other agency on 
all redevelopment plans submitted to it prior to approving those 
redevelopment plans, and the planning or other agency shall 
submit its written opinion within 30 days.  
    Sec. 28.  [469.028] [MUNICIPAL GOVERNING BODY.] 
    Subdivision 1.  [FINDINGS, NOTICE, DETERMINATION.] When an 
authority determines that a redevelopment project should be 
undertaken, it shall apply to the governing body of the city in 
which the project is located for approval.  The application 
shall be accompanied by a redevelopment plan, a statement of the 
method proposed for financing the project, and the written 
opinion of the planning agency, if there is one.  Before 
approving any redevelopment plan, the governing body shall hold 
a public hearing thereon after published notice in a newspaper 
of general circulation in the municipality at least once not 
less than ten days nor more than 30 days prior to the date of 
the hearing.  
    Subd. 2.  [FINDINGS, NOTICE, DETERMINATION; GOVERNING 
BODY.] The authority shall not proceed with the project unless 
the governing body finds by resolution that:  
    (1) the land in the project area would not be made 
available for redevelopment without the financial aid to be 
sought; 
    (2) the redevelopment plans for the redevelopment areas in 
the locality will afford maximum opportunity, consistent with 
the needs of the locality as a whole, for the redevelopment of 
the areas by private enterprise; and 
    (3) the redevelopment plan conforms to a general plan for 
the development of the locality as a whole.  
    The governing body shall within 30 days after submission of 
the application, or resubmission as hereinafter provided, give 
written notice to the authority of its decision with respect to 
the project.  When an authority has determined the location of a 
proposed redevelopment project, it may, without awaiting the 
approval of the governing body, proceed, by option or otherwise, 
to obtain control of the real property within the area, but it 
shall not, without the prior approval by the governing body of 
the redevelopment plan, unconditionally obligate itself to 
purchase any such property.  A plan which has not been approved 
by the governing body when submitted to it may be again 
submitted to it with the modifications necessary to meet its 
objections.  Once approved, the determination of the authority 
to undertake the project and the resolution of the governing 
body shall be conclusive, in any condemnation proceeding, of the 
public need for the project.  
    Subd. 3.  [ACQUISITION OF OPEN LAND.] A redevelopment 
project may include any work or undertaking to acquire open or 
undeveloped land determined to be blighted by virtue of the 
following conditions: 
    (1) unusual and difficult physical characteristics of the 
ground; 
    (2) the existence of faulty planning characterized by the 
subdivision or sale of lots laid out in disregard of the 
contours or of irregular form and shape or of inadequate size; 
or 
    (3) a combination of these or other conditions which have 
prevented normal development of the land by private enterprise 
and have resulted in a stagnant and unproductive condition of 
land potentially useful and valuable for contributing to the 
public health, safety and welfare.  Acquisition of such land 
shall be a redevelopment project only if a redevelopment plan 
has been adopted which provides for the elimination of these 
conditions, thereby making the land useful and valuable for 
contributing to the public health, safety and welfare and the 
acquisition of the land is necessary to carry out the 
redevelopment plan.  
    Subd. 4.  [ACQUISITION OF UNUSED OR INAPPROPRIATELY USED 
LAND.] A redevelopment project may include any work or 
undertaking to acquire land or space that is vacant, unused, 
underused or inappropriately used, including infrequently used 
rail yards and rail storage facilities, and excessive or vacated 
railroad rights-of-way; air rights over streets, expressways, 
railroads, waterways, and similar locations; land which is 
occupied by functionally obsolete nonresidential buildings, or 
is used for low utility purposes, or is covered by shallow 
water, or is subject to periodic flooding, or consists of unused 
or underused slips or dock areas or other waterfront property.  
This subdivision applies only to land or space that the 
authority determines may be developed at a cost reasonably 
related to the public purpose to be served without major 
residential clearance activities, and with full consideration of 
the preservation of beneficial aspects of the urban and natural 
environment, for uses that are consistent with emphasis on 
housing for low and moderate income families.  These uses 
include the provision of schools, hospitals, parks and other 
essential public facilities and, where appropriate, all uses 
associated with new community development programs as defined in 
the United States urban growth and new community development act 
of 1970, as amended, or similar large scale undertakings related 
to inner city needs, including concentrated sources of 
employment.  
    Subd. 5.  [EARLY ACQUISITION.] When an authority has 
determined the location of a proposed redevelopment project, but 
prior to the approval of the redevelopment plan and project as 
provided in subdivision 2, the authority may acquire individual 
tracts of real property with the approval of the governing body 
as to each separate tract.  Before approving early acquisition, 
the governing body shall hold a public hearing on the proposed 
acquisition activities after published notice in a newspaper of 
general circulation in the municipality at least once not less 
than ten days nor more than 30 days prior to the date of the 
hearing.  
    The authority shall not proceed with the acquisition unless 
the governing body finds by resolution that (1) the proposed 
acquisition is necessary to carry out public improvements in the 
area, or that the acquisition will contribute to the elimination 
of blight or deterioration within the area or that the 
acquisition is necessary to relieve hardship; and (2) there is a 
feasible method for the relocation of families and individuals 
to be displaced by the proposed acquisition.  
    The governing body may, in approving early acquisition, 
agree to assume the responsibility for any loss that may arise 
as a result of the acquisition of land and related activities, 
including any costs of demolition, removal and relocation, in 
the event that the property so acquired is not used for urban 
renewal purposes because the urban renewal plan is not approved, 
or is amended to omit the acquired property or is abandoned for 
any reason.  Nothing in this subdivision shall be construed to 
waive the requirement for public hearing upon the redevelopment 
plan for the redevelopment project.  
    Sec. 29.  [469.029] [DISPOSAL OF PROPERTY.] 
    Subdivision 1.  [SALE, LEASE, OR DEVELOPMENT.] In 
accordance with a redevelopment plan, an authority may make any 
of its land in a redevelopment project available for use by 
private individuals, firms, corporations, partnerships, 
insurance companies, or other private interests, or by public 
agencies, by sale, lease, or otherwise, or the authority itself 
may retain property for redevelopment by it.  The land shall be 
made available at a price that shall, except as provided for in 
subdivisions 9 and 10, take into consideration the estimated 
fair market or rental value of the cleared land as determined 
pursuant to section 32, for proposed uses in accordance with the 
redevelopment plan.  
    Subd. 2.  [NOTICE; PUBLIC HEARING; DETERMINATION; TERMS AND 
CONDITIONS.] Any such lease or sale may be made without public 
bidding but only after a public hearing, after published notice, 
by the authority at least once not less than ten days nor more 
than 30 days prior to the date of the hearing upon the proposed 
lease or sale and the provisions thereof.  The terms of any such 
lease shall be fixed by the authority, and the instrument of 
lease may provide for renewals upon reappraisals and with 
rentals and other provisions adjusted to the reappraisals.  
Every such lease or sale shall provide that the lessee or 
purchaser shall carry out or cause to be carried out the 
approved project area redevelopment plan or approved 
modifications thereof and that no use shall be made of any land 
or real property included in the lease or sale nor any building 
or structure erected thereon which does not conform to the 
approved plan or approved modifications thereof.  In the 
instrument of lease or sale the authority may include other 
terms, conditions, and provisions in the judgment of the 
authority will provide reasonable assurance of the priority of 
the obligations of the lease or sale and of conformance to the 
plan over any other obligations of the lessee or purchaser, and 
also assurance of the financial and legal ability of the lessee 
or purchaser to carry out and conform to the plan and the terms 
and conditions of the lease or sale, to begin the building of 
any improvements within a period of time which the authority 
fixes as reasonable.  The instrument shall also include the 
terms, conditions and specifications concerning buildings, 
improvements, sub-leases, or tenancies, maintenance and 
management, and any other related matters the authority may 
reasonably impose or approve, including provisions whereby the 
obligations to carry out and conform to the project area plan 
shall run with the land.  If maximum rentals to be charged to 
tenants of housing are specified, provision may be made for 
periodic reconsideration of the rental bases, with a view to 
proposing modification of the project area plan with respect to 
the rentals.  
    Subd. 3.  [PROPERTY DEVOTED TO PUBLIC USES; TRANSFER.] 
After the property in a project area has been assembled by an 
authority, the authority may transfer by deed to local public 
bodies those pieces of property which, in accordance with the 
redevelopment plan, are to be devoted to public uses, other than 
public housing or redevelopment purposes.  Except for property 
transferred by dedication, gift, or exchange, the transferee 
body shall pay to the authority the sum agreed upon, and, in the 
absence of agreement, the sum determined by arbitration.  The 
authority shall reimburse the redevelopment project fund the 
fair use value of any property in a redevelopment project 
transferred to a public low-rent housing project.  
    Subd. 4.  [DISPOSITION IN PARTS.] The authority may lease 
or sell parts of a project area separately to any persons.  Any 
such sale or lease of a part or parts of a project area shall be 
subject to the provisions of this section, excluding property 
required for public low-rent housing projects.  
    Subd. 5.  [LIMITATION UPON DISPOSAL BY PURCHASER.] Until 
the authority certifies that all building constructions and 
other physical improvements specified to be done and made by the 
purchaser of the area have been completed, the purchaser shall 
not convey the area, or any part thereof, without the consent of 
the authority.  Consent shall not be given unless the grantee or 
mortgagee of the purchaser is obligated by written instrument to 
the authority to carry out that portion of the redevelopment 
plan which falls within the boundaries of the conveyed property, 
and also that the grantee, the grantee's heirs, representatives, 
successors, and assigns, shall not convey, lease, or let the 
conveyed property or any part thereof, or erect or use any 
building or structure erected thereon, except in conformance 
with the approved project area redevelopment plan or approved 
modifications thereof.  
    Subd. 6.  [MODIFICATION OF PLAN.] A redevelopment plan may 
be modified at any time.  The modification must be adopted by 
the authority and the governing body of the political 
subdivision in which the project is located, upon the notice and 
after the public hearing required for the original adoption of 
the redevelopment plan.  If the authority determines the 
necessity of changes in an approved redevelopment plan or 
approved modification thereof, which changes do not alter or 
affect the exterior boundaries, and do not substantially alter 
or affect the general land uses established in the plan, the 
changes shall not constitute a modification of the redevelopment 
plan nor require approval by the governing body of the political 
subdivision in which the project is located.  
    Subd. 7.  [PURCHASER OR LESSEE TO FURNISH PERFORMANCE 
BOND.] As security for its fulfillment of the agreement with the 
authority, a purchaser or lessee shall furnish a performance 
bond, with the surety and in the form and amount the authority 
may approve, or make any other guaranty the authority deems 
necessary in the public interest.  If the authority finds that 
the redevelopment is not being carried out or maintained in 
accordance with the contract terms and conditions, or there is a 
failure to prosecute the work with diligence, or to assume its 
completion on time, it shall notify the purchaser or lessee and 
the surety in writing of the noncompliance.  Unless the 
purchaser or lessee complies with the terms of agreement within 
20 days from the date of the notice, the authority may take over 
the work and may cause the work to be done, and the cost of the 
work shall be paid by the surety.  The authority may take 
possession of and utilize in completion of the work the 
materials, appliances, and plant as may be on the site of the 
work and necessary for it. 
    Subd. 8.  [DISCRIMINATION FORBIDDEN.] There shall be no 
discrimination in the use of any land in a redevelopment project 
because of race or religious, political, or other affiliations.  
    Subd. 9.  [SALE, GRANT OR DEVELOPMENT.] With or without 
accordance to a redevelopment plan, an authority may make any of 
its lands in a project that are vacant, open and undeveloped or 
lands that contain vacated residential dwelling structures that 
are substandard as that term is defined in section 12, 
subdivision 1, clause (7), available for use by sale, lease, 
grant, transfer, conveyance, or otherwise to persons or families 
of low and moderate income.  The property shall be made 
available at a price which may take into consideration the 
estimated fair market value of the real estate, as determined 
pursuant to section 32, if the low or moderate income persons or 
families have the financial ability or building trade skills, as 
determined by the authority, to build on the vacant, open and 
undeveloped land or to repair, improve or rehabilitate the 
residential dwelling structures, so as to conform with the 
applicable state, county, or city, health, housing, building, 
fire prevention and housing maintenance codes within a 
reasonable period of time as determined by the authority.  The 
authority may require an agreement from those persons or 
families of low or moderate income to build on the lands or to 
repair, improve, or rehabilitate the residential dwelling 
structures within a reasonable period of time so as to conform 
to the codes as a condition to final legal title to the lands 
and the residential dwelling units.  Nothing in Laws 1974, 
chapter 228 shall prohibit an authority from making 
rehabilitation loans and grants, pursuant to section 12, 
subdivision 6, or procuring other authorized financial 
assistance for persons or families of low and moderate income 
who acquire real property pursuant to this section, in 
furtherance of the objectives of this section.  
    Subd. 10.  [EXCESS LAND.] On or before December 31 each 
year, each authority shall make a survey of all lands held, 
owned or controlled by it to determine what land, including air 
rights, is in excess of its foreseeable needs.  A description of 
each parcel found to be in excess of foreseeable needs shall be 
made a matter of public record.  Any low or moderate income 
resident or nonprofit housing corporation shall upon request be 
provided with a list of the parcels without charge.  With or 
without accordance to a redevelopment plan, an authority may 
make the excess lands available for use as a housing or housing 
development project by a nonprofit housing corporation by sale, 
lease, grant, transfer, conveyance or otherwise.  The price may 
take into consideration the estimated fair market or rental 
value of the real property, as determined pursuant to section 32 
and upon terms and conditions, notwithstanding any other 
provisions of law to the contrary, that the authority deems to 
be best suited to the development of the parcel for housing 
available to persons and families of low and moderate income.  
    Sec. 30.  [469.030] [TEMPORARY RELOCATION OF DISPLACED 
FAMILIES.] 
    Prior to its approval of any redevelopment plan, the 
authority shall be satisfied that there is a feasible method for 
the temporary relocation of families to be displaced from the 
project area, and that there are available or will be provided, 
in the project area or in other areas not less desirable in 
regard to public utilities and public and commercial facilities 
and at rents or prices within the financial means of the 
families displaced from the project area, decent, safe, and 
sanitary dwellings equal in number to the number of the 
displaced families.  
    Sec. 31.  [469.031] [PROVISIONAL ACCEPTANCE BY AUTHORITY OF 
FUND OR PROPERTY.] 
    As an aid in the acquisition of the real property of a 
project area, the authority may accept a fund, or, at an agreed 
value, any parcel or property within the area, from any 
partnership or individual.  Acceptance shall be subject to a 
provision that, if the supplier of the fund or the conveyor of 
the property purchases the project area or any part thereof, the 
fund or the agreed value of the property shall be credited on 
the purchase price of the area or part thereof, and, if there is 
an excess above the cost of acquisition of the area, the excess 
shall be returned, and that, if the supplier or conveyor does 
not purchase the area or any part thereof, the amount of the 
fund or the agreed value of the property shall be paid to the 
supplier or conveyor.  
    Sec. 32.  [469.032] [USE VALUE.] 
    Subdivision 1.  [DETERMINATION.] Prior to lease or sale of 
land in a project area, the authority shall, as an aid in 
determining the rentals and other terms upon which it will lease 
or the price at which it will sell the area or parts of it, 
place an estimated fair market or rental value upon each piece 
or tract of land within the area which, in accordance with the 
plan, is to be used for private uses or for low-rent housing.  
The value shall be based on the planned use.  For the purpose of 
this valuation, the authority may cause a fair market appraisal 
to be made by two or more land value experts employed by it for 
the purpose or it may use the land appraisal services of the 
municipality, nothing contained in this section shall be 
construed as requiring the authority to base its rentals or 
selling prices upon the appraisal.  The authority may 
redetermine its estimated values both prior to and after receipt 
by it of any proposal or proposals to purchase or lease property.
    Subd. 2.  [USE VALUE.] The aggregate use value placed for 
purposes of lease or sale upon all land within a project area 
leased or sold by an authority pursuant to sections 1 to 47 
shall exclude the cost of old buildings destroyed and the 
demolition and clearance thereof. 
    Sec. 33.  [469.033] [PUBLIC REDEVELOPMENT COST; PROCEEDS;  
FINANCING.] 
    Subdivision 1.  [FINANCING PLANS AUTHORIZED.] The entire 
cost of a project as defined in section 2, subdivision 12, 
including administrative expense of the authority allocable to 
the project and debt charges and all other costs authorized to 
be incurred by the authority in sections 1 to 47, shall be known 
as the public redevelopment cost.  The proceeds from the sale or 
lease of property in a project shall be known as the capital 
proceeds.  The capital proceeds from land sold may pay back only 
a portion of the public redevelopment cost.  An authority may 
finance the projects in any one or by any combination of the 
following methods.  
    Subd. 2.  [FEDERAL GRANTS.] The authority may accept grants 
or other financial assistance from the federal government as 
provided in sections 1 to 47.  Before it uses other financial 
methods authorized by this section, the authority shall use all 
federal funds for which the project qualifies. 
    Subd. 3.  [BOND ISSUE.] An authority may issue its bonds or 
other obligations as provided in sections 1 to 47. 
    Subd. 4.  [REVENUE POOL; USE.] The authority may provide 
that all revenues received from its redevelopment areas be 
placed in a pool for the payment of interest and principal on 
all bonds issued for any redevelopment project, and the revenue 
from all such areas shall be paid into the pool until all 
outstanding bonds have been fully paid.  
    Subd. 5.  [SPECIAL BENEFIT TAX FUND.] If the authority 
issues bonds to finance a redevelopment project, it may, with 
the consent of the governing body obtained at the time of the 
approval of the redevelopment plan as required in section 28, 
notify the county treasurer to set aside in a special fund, for 
the retirement of the bonds and interest on them, all or part of 
the real estate tax revenues derived from the real property in 
the redevelopment area which is in excess of the tax revenue 
derived therefrom in the tax year immediately preceding the 
acquisition of the property by the authority.  The county 
treasurer shall do so.  This setting aside of funds shall 
continue until the bonds have been retired.  This subdivision 
applies only to property that the governing body has by 
resolution designated for inclusion in a project prior to August 
1, 1979.  
    Subd. 6.  [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.] 
All of the territory included within the area of operation of 
any authority shall constitute a taxing district for the purpose 
of levying and collecting special benefit taxes as provided in 
this subdivision.  All of the taxable property, both real and 
personal, within that taxing district shall be deemed to be 
benefited by projects to the extent of the special taxes levied 
under this subdivision.  Subject to the consent by resolution of 
the governing body of the city in and for which it was created, 
an authority may levy each year a special tax upon all property, 
both real and personal, within that taxing district.  The 
authority shall cause the tax so levied each year to be 
certified to the auditor of the county in which the taxing 
district is located on or before October 10 each year.  The tax 
shall be extended, spread, and included with and as a part of 
the general taxes for state, county, and municipal purposes by 
the county auditor, to be collected and enforced therewith, 
together with the penalty, interest, and costs.  As the tax, 
including any penalties, interest, and costs, is collected by 
the county treasurer it shall be accumulated and kept in a 
separate fund to be known as the "housing and redevelopment 
project fund."  The money in the fund shall be turned over to 
the authority at the same time and in the same manner that the 
tax collections for the city are turned over to the city, and 
shall be expended and applied for the purposes of sections 1 to 
47, and for no other purpose.  It shall be paid out upon 
vouchers signed by the chairman of the authority or his 
authorized representative.  The amount of the special tax levy 
shall be an amount approved by the governing body of the city, 
but shall not exceed ten cents on each $100 of taxable valuation 
in the area of operation, except that in cities of the first 
class having a population of less than 200,000, the special tax 
levy shall not exceed five cents on each $100 of taxable 
valuation in the area of operation.  The authority may levy an 
additional levy, not to exceed one cent on each $100 of taxable 
valuation in the area of operation, to be used to defray costs 
of providing informational service and relocation assistance as 
set forth in section 462.445, subdivision 4.  The authority 
shall each year formulate and file a budget in accordance with 
the budget procedure of the city in the same manner as required 
of executive departments of the city or, if no budgets are 
required to be filed, by August first.  The amount of the tax 
levy for the following year shall be based on that budget and 
shall be approved by the governing body. 
    Subd. 7.  [INACTIVE AUTHORITIES; TRANSFER OF FUNDS; 
DISSOLUTION.] The authority may transfer to the city in and for 
which it was created all property, assets, cash or other funds 
held or used by the authority which were derived from the 
special benefit tax for redevelopment levied pursuant to 
subdivision 6 prior to March 6, 1953, whenever collected.  Upon 
any such transfer, an authority shall not thereafter levy the 
tax or exercise the redevelopment powers of sections 1 to 47.  
All cash or other funds transferred to the city shall be used 
exclusively for permanent improvements in the city or the 
retirement of debts or bonds incurred for permanent improvements 
in the city.  An authority which transfers its property, assets, 
cash or other funds derived from the special benefit tax for 
redevelopment and which has not entered into a contract with the 
federal government with respect to any low rent public housing 
project prior to March 6, 1953, shall be dissolved as herein 
provided.  After a public hearing after ten days published 
notice thereof in a newspaper of general circulation in the 
city, the governing body of a city in and for which an authority 
has been created may dissolve the authority if the authority has 
not entered into any contract with the federal government or any 
agency or instrumentality thereof for a loan or a grant with 
respect to any urban redevelopment or low rent public housing 
project.  The resolution or ordinance dissolving the authority 
shall be published in the same manner in which ordinances are 
published in the city and the authority shall be dissolved when 
the resolution or ordinance becomes finally effective.  The 
clerk of the governing body of the municipality shall furnish to 
the commissioner of energy and economic development a certified 
copy of the resolution or ordinance of the governing body 
dissolving the authority.  All property, records, assets, cash 
or other funds held or used by an authority shall be transferred 
to and become the property of the municipality and cash or other 
funds shall be used as herein provided.  Upon dissolution of an 
authority, all rights of an authority against any person, firm 
or corporation shall accrue to and be enforced by the 
municipality. 
    Sec. 34.  [469.034] [BOND ISSUE FOR CORPORATE PURPOSES.] 
    An authority may issue bonds for any of its corporate 
purposes.  The bonds may be the type the authority determines, 
including bonds on which the principal and interest are payable 
exclusively from the income and revenues of the project financed 
with the proceeds of the bonds, or exclusively from the income 
and revenues of certain designated projects, whether or not they 
are financed in whole or in part with the proceeds of the 
bonds.  The bonds may be additionally secured by (1) a pledge of 
any grant or contributions from the federal government or other 
source, or (2) a pledge of any income or revenues of the 
authority from the project for which the proceeds of the bonds 
are to be used, or (3) a mortgage of any project or other 
property of the authority.  No proceeds of bonds issued for or 
revenue authorized for or derived from any redevelopment project 
or area shall be used to pay the bonds or costs of, or make 
contributions or loans to, any public housing project.  The 
proceeds of bonds issued for or revenues authorized for or 
derived from any one public housing project shall not be used to 
pay the bonds or costs of, or make contributions or loans to any 
other public housing project until the bonds and costs of the 
public housing project for which those bonds were issued or from 
which those revenues were derived or for which they were 
authorized shall be fully paid.  Neither the commissioners of an 
authority nor any person executing the bonds shall be liable 
personally on the bonds by reason of the issuance thereof.  The 
bonds of an authority shall not be a debt of the city, the state 
or any political subdivision, and neither the city nor the state 
or any political subdivision shall be liable on them, nor shall 
the bonds be payable out of any funds or properties other than 
those of the authority; the bonds shall state this on their 
face.  The bonds shall not constitute an indebtedness within the 
meaning of any constitutional or statutory debt limitation or 
restriction.  Bonds of an authority are declared to be issued 
for an essential public and governmental purpose and to be 
public instrumentalities.  The provisions of sections 1 to 47 
exempting from taxation authorities, their properties and 
income, shall be considered additional security for the 
repayment of bonds and shall constitute, by virtue of sections 1 
to 47 and without the same being restated in the bonds, a 
contract between the (1) bondholders and each of them, including 
all transferees of the bonds, and (2) the respective authorities 
issuing the bonds and the state.  An authority may by covenant 
confer upon the holder of the bonds the rights and remedies it 
deems necessary or advisable, including the right in the event 
of default to have a receiver appointed to take possession of 
and operate the project.  When the obligations issued by an 
authority to assist in financing the development of a project 
have been retired and federal contributions have been 
discontinued, the exemptions from taxes and special assessments 
for that project shall terminate.  
    Sec. 35.  [469.035] [MANNER OF BOND ISSUANCE; SALE.] 
    Bonds of an authority shall be authorized by its resolution.
They may be issued in one or more series and shall bear the date 
or dates, mature at the time or times, bear interest at the rate 
or rates, not exceeding seven percent per annum, be in the 
denomination or denominations, be in the form either coupon or 
registered, carry the conversion or registration privileges, 
have the rank or priority, be executed in the manner, be payable 
in the medium of payment at the place or places, and be subject 
to the terms of redemption with or without premium, as the 
resolution, its trust indenture or mortgage provides.  The bonds 
may be sold at public or private sale at not less than par.  
Notwithstanding any other law, bonds issued pursuant to sections 
1 to 47 shall be fully negotiable.  In any suit, action, or 
proceedings involving the validity or enforceability of any 
bonds of an authority or the security for the bonds, 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 that purpose, and the project shall be 
conclusively deemed to have been planned, located, and carried 
out in accordance with the purposes and provisions of sections 1 
to 47.  Notwithstanding any other provision of this section, an 
authority may execute a note secured by a first mortgage at a 
rate of interest in excess of seven percent per annum with the 
Minnesota housing finance agency pursuant to chapter 462A to 
finance a housing project which is subsidized in whole or in 
part with money provided by the federal government. 
    In cities of the first class, the governing body of the 
city must approve all notes executed with the Minnesota housing 
finance agency pursuant to this section if the interest rate on 
the note exceeds seven percent. 
    Sec. 36.  [469.036] [FEDERAL VOLUME LIMITATION ACT.] 
    Sections 474A.01 to 474A.21 apply to any issuance of 
obligations under sections 1 to 47 that are subject to 
limitation under a federal volume limitation act as defined in 
section 474A.02, subdivision 9, or existing federal tax law as 
defined in section 474A.02, subdivision 8. 
    Sec. 37.  [469.037] [ENFORCEMENT BY OBLIGEE OF PROVISIONS 
AND COVENANTS IN CONTRACTS.] 
    An obligee of an authority shall have the right, subject 
only to any contractual restrictions binding upon the obligee; 
(1) by mandamus, suit, action, or proceeding at law or in equity 
to compel the authority and its commissioners, officers, agents, 
or employees to perform every term, provision, and covenant 
contained in any contract of the authority with or for the 
benefit of the obligee and to require the carrying out of any or 
all covenants and agreements of the authority and the 
fulfillment of all duties imposed upon the authority by sections 
1 to 47; and (2) by suit, action, or proceeding in equity to 
enjoin any acts or things which may be unlawful or the violation 
of any of the rights of the obligee of the authority. 
    Sec. 38.  [469.038] [BONDS, A LEGAL INVESTMENT.] 
    When bonds issued by an authority or bonds issued by any 
public housing authority or agency in the United States are 
secured by a pledge of annual contributions to be paid by the 
United States government or any agency thereof, all banks, 
bankers, trust companies, savings banks and institutions, 
investment companies, savings, building and loan associations, 
insurance companies, insurance associations, and other persons 
carrying on a banking or insurance business may legally invest 
any sinking funds, moneys, or other funds belonging to them or 
within their control in the bonds, and the bonds shall be 
authorized security for all public deposits.  
    Sec. 39.  [469.039] [EXEMPTION FROM PROCESS.] 
    All real property of an authority shall be exempt from levy 
and sale under execution, and no execution or other judicial 
process shall issue against such property, nor shall any 
judgment against an authority be a charge or lien against its 
real property, but judgments may be enforced as provided in 
section 14.  This section shall not apply to or limit the right 
of obligees to foreclose or otherwise enforce any mortgage of an 
authority or the right of obligees to pursue any remedies for 
the enforcement of any pledge or lien given by an authority on 
its rents, fees, or revenues, or the right of the federal 
government to pursue any remedies conferred upon it pursuant to 
the provisions of sections 1 to 47. 
    Sec. 40.  [469.040] [TAX STATUS.] 
    Subdivision 1.  [DECLARATION, ESSENTIAL PUBLIC AND 
GOVERNMENTAL PURPOSES.] The property of an authority is public 
property used for essential public and governmental purposes.  
The property and the authority shall be exempt from all taxes 
and special assessments of the city, the county, the state or 
any political subdivision thereof.  "Taxes" does not include 
charges for utilities and special services, such as heat, water, 
electricity, gas, sewage disposal, or garbage removal.  When the 
obligations issued by an authority to assist in financing the 
development of a project have been retired and federal 
contributions have been discontinued, then the exemptions from 
taxes and special assessments for that project shall terminate.  
    Subd. 2.  [LEASED PROPERTY, EXCEPTION.] Notwithstanding the 
provisions of subdivision 1, any property that the authority 
leases to private individuals or corporations for development in 
connection with a redevelopment project shall have the same tax 
status as if the leased property were owned by the private 
individuals or corporations. 
    Subd. 3.  [STATEMENT FILED WITH ASSESSOR; PERCENTAGE TAX ON 
RENTALS.] Notwithstanding the provisions of subdivision 1, after 
a housing project carried on under sections 16 to 26 has become 
occupied, in whole or in part, an authority shall file with the 
assessor, on or before May 1 of each year, a statement of the 
aggregate shelter rentals of that project collected during the 
preceding calendar year.  Unless a greater amount has been 
agreed upon between the authority and the city in and for which 
the authority was created, five percent of the aggregate shelter 
rentals shall be charged to the authority as a service charge 
for the services and facilities to be furnished with respect to 
that project.  The service charge shall be collected from the 
authority in the manner provided by law for the assessment and 
collection of taxes.  The amount so collected shall be 
distributed to the several taxing bodies in the same proportion 
as the tax rate of each bears to the total tax rate of those 
taxing bodies.  A city in and for which an authority has been 
created may agree with the authority for the payment of a 
service charge for a housing project in an amount greater than 
five percent of the aggregate annual shelter rentals of any 
project, upon the basis of shelter rentals or upon another basis 
agreed upon.  The service charge may not exceed the amount which 
would be payable in taxes were the property not exempt.  If such 
an agreement is made the service charge so agreed upon shall be 
collected and distributed in the manner above provided.  If the 
project has become occupied, or if the land upon which the 
project is to be constructed has been acquired, the agreement 
shall specify the location of the project for which the 
agreement is made.  "Shelter rental" means the total rentals of 
a housing project exclusive of any charge for utilities and 
special services such as heat, water, electricity, gas, sewage 
disposal, or garbage removal.  The records of each housing 
project shall be open to inspection by the proper assessing 
officer.  
    Sec. 41.  [469.041] [STATE PUBLIC BODIES, POWERS AS TO 
PROJECTS.] 
    For the purpose of aiding and cooperating in the planning, 
undertaking, construction, or operation of projects, any state 
public body may upon the terms, with or without consideration, 
as it may determine: 
    (1) Dedicate, sell, convey, or lease any of its interests 
in any property, or grant easements, licenses, or any other 
rights or privileges therein to an authority.  Except in cities 
of the first class having a population of less than 200,000, the 
public body may pay the bonds of or make loans or contributions 
for redevelopment projects, and the receipt or expenditure of 
any moneys expended hereunder by the state public body shall not 
be included within the definition of any limitation imposed on 
per capita taxing or spending in the charter of the state public 
body.  No state public body may use any revenues or money of 
that state public body to pay the bonds of or make any loans or 
contributions to any public housing project, except to a public 
low-rent housing project (i) for which financial assistance is 
provided by the federal government which requires a municipality 
or other local public body to use its revenues or money for a 
direct loan or grant to the project as a condition for federal 
financial assistance and (ii) where the local financial 
assistance for the project is authorized by resolution of the 
governing body of the municipality; 
    (2) Cause parks, playgrounds, recreational, community, 
education, water, sewer or drainage facilities, or any other 
works which it may undertake, to be furnished adjacent to or in 
connection with such projects; 
    (3) Approve, through its governing body or through an 
agency designated by it for the purpose, redevelopment plans, 
plan or replan, zone or rezone its parks; in the case of a city 
or town, make changes in its map; the governing body of any city 
may waive any building code requirements in connection with the 
development of projects; 
    (4) Cause services to be furnished to the authority of the 
character which it may otherwise furnish; 
    (5) Enter into agreements with respect to the exercise by 
it of its powers relating to the repair, closing, or demolition 
of unsafe, unsanitary or unfit buildings; 
    (6) Do any and all things necessary or convenient to aid 
and cooperate in the planning, undertaking, construction, or 
operation of the projects; 
    (7) Incur the entire expense of any public improvements 
made by it in exercising the powers granted in sections 1 to 47; 
    (8) Enter into agreements with an authority respecting 
action to be taken by the state public body pursuant to any of 
the powers granted by sections 1 to 47; the agreements may 
extend over any period, notwithstanding any law to the contrary; 
and 
    (9) Furnish funds available to it from any source, 
including the proceeds of bonds, to an authority to pay all or 
any part of the cost to the authority of the activities 
authorized by section 12, subdivision 1, clause (7). 
    Sec. 42.  [469.042] [AGREEMENTS RESPECTING TAX INCREMENTS 
AND EQUIVALENTS; PLEDGE FOR BONDS.] 
    Subdivision 1.  [GENERAL.] Any city or other state public 
body within the limits of which a project of an authority is 
wholly or partially located may agree with the authority with 
respect to payment by the authority of sums in lieu of taxes for 
any year or period of years in accordance with the provisions of 
section 40, but for no longer than the period of tax exemption 
provided for under that section.  If property owned by the 
authority in a redevelopment project area is leased or otherwise 
made available by the authority to a private individual, firm, 
or corporation which previously owned the same or other property 
within the area, not for development in connection with the 
project but for temporary use pending relocation of the former 
owner's residence or business, the authority may agree to 
payment of sums in lieu of taxes for any year or period of 
temporary use.  The payments shall not exceed the amount of the 
annual rentals or other payments it receives for the use.  
During the use the property and the authority shall be exempt 
from all taxes and special assessments as provided in section 
40, and the provisions of section 272.01, subdivision 2 and of 
section 273.19 shall not apply to the property or to that use.  
In connection with any redevelopment project, an authority may 
make further agreements respecting taxes as provided below.  
    Subd. 2.  [ORIGINAL TAXABLE VALUE.] Upon or after approval 
of a redevelopment project of any housing and redevelopment 
authority under section 28, the auditor of the county in which 
it is situated shall upon request of the authority certify the 
assessed valuation of all taxable real property within the 
project area as then most recently determined, which is referred 
to in this section as the "original taxable value."  The auditor 
shall certify to the authority each year thereafter the amount 
by which the original taxable value has increased or decreased, 
and the proportion which any such increase bears to the total 
assessed valuation of the real property for that year or the 
proportion which any such decrease bears to the original taxable 
value.  This subdivision and subdivision 3 shall not apply to 
any redevelopment project, certification of which is requested 
subsequent to August 1, 1979.  
    Subd. 3.  [TAX INCREMENTS.] In each subsequent year the 
county auditor shall include no more than the original taxable 
value of the real property in the assessed valuation upon which 
he computes the mill rates of all taxes levied by the state, the 
county, the city or town, the school district and every other 
taxing district in which the project area is situated.  The 
auditor shall extend all mill rates so determined against the 
entire assessed valuation of the real property for that year.  
In each year for which the assessed valuation exceeds the 
original taxable value, the county treasurer shall remit to the 
authority, instead of the taxing districts, that proportion of 
all taxes paid that year on the real property in the project 
area which the excess valuation bears to the total assessed 
valuation.  The amount so remitted each year is referred to in 
this section as the "tax increment" for that year.  Tax 
increments received with respect to any redevelopment project 
shall be segregated by the authority receiving them in a special 
account on its official books and records until the public 
redevelopment cost of the project, including interest on all 
money borrowed therefor, has been fully paid, and the city or 
other public body in which the project is situated has been 
fully reimbursed from the tax increments or revenues of the 
project for any principal and interest on general obligation 
bonds which it has issued for the project and has paid from 
taxes levied on other property within its corporate limits.  The 
payment shall be reported to the county auditor, who shall 
thereafter include the entire assessed valuation of the project 
area in the assessed valuations upon which tax mill rates are 
computed and extended and taxes are remitted to all taxing 
districts.  
    Subd. 4.  [TAX INCREMENT FINANCING.] The authority may 
pledge and appropriate any part or all of the tax increments 
received for any redevelopment project, and any part or all of 
the revenues received from lands in the project area while owned 
by the authority, for the payment of the principal of and 
interest on bonds issued in aid of the project pursuant to 
sections 34, 41, or 153 to 166, by the authority or by the 
governing body of the municipality or other state public body 
within whose corporate limits the project area is situated.  Any 
such pledge for the payment of bonds issued by the governing 
body shall be made by written agreement executed on behalf of 
the authority and the governing body and filed with the county 
auditor.  The estimated collections of the tax increments 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 3.  When 
such an agreement is made and filed, the bonds may be issued by 
the governing body 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.  Bonds shall not be issued nor tax increments or 
other revenues pledged pursuant to this subdivision subsequent 
to August 1, 1979.  
    Sec. 43.  [469.043] [PROPERTY TAX EXEMPTION.] 
    Subdivision 1.  [APPLICATION.] A developer proposing to 
construct a building on land located within a redevelopment 
project as defined in section 2, subdivision 14, may apply to 
the governing body of the city in which the land is located to 
obtain a partial tax exemption as provided in subdivision 2 for 
the approved property.  The land and the building to be 
constructed thereon are referred to in this section as the 
"development."  The development shall be designed and used 
primarily for housing purposes but portions of it may be planned 
and used for related business, commercial, cultural, or 
recreational purposes, consistent with the project plan.  In 
applying for the tax exemption, the developer must submit a plan 
of the development that shall contain a general description of 
the area to be redeveloped and a statement of the plan for 
redevelopment that includes: 
    (1) height and bulk of structures, density of population 
and percentage of land covered by structures as to their 
conformity with the purposes of sections 1 to 47 and with the 
project plan, if any; and the relationship of the density of 
population contemplated by the development plan, or project 
plan, to the distribution of the population of the city in other 
areas or parts thereof; 
    (2) provision, if any, for business or commercial 
facilities related to the development, relationship to existing 
and planned public facilities, adequacy and planned 
rearrangement of street facilities and provisions for light, 
air, cultural, and recreational facilities as to their 
conformity with the purposes of sections 1 to 47 and their 
adequacy for accommodation of the density of population 
contemplated by the development plan or project plan; and 
    (3) a development contract with the authority covering the 
acquisition, construction, financing, operation, and maintenance 
of the development.  The contract shall provide that: 
    (a) after deducting all operating expenses, debt service 
payments, taxes or payments in lieu of taxes, and assessments, 
the developer may be paid annually out of the earnings of the 
project an amount equal to a specified percentage of the equity 
invested in the project; the percentage shall be fixed for the 
term of the tax exemption and shall be determined at the time of 
the approval of the development contract, provided that no 
percentage greater than eight percent shall be approved; the 
contract shall set out the terms of the developer's return on 
equity and shall define "developer's invested equity," "project 
earnings," "debt service," and "operating expenses"; and that 
any cash surplus derived from earnings from that project 
remaining in the treasury of the developer in excess of the 
amount necessary to provide such cumulative annual sums shall, 
upon a conveyance of the project or upon a dissolution of the 
company, be paid into the general fund of the city or town in 
which that project is located; and 
    (b) a provision that, so long as this section remains 
applicable to a project, the real property of the project shall 
not be sold, transferred, or assigned except as permitted by the 
terms of the contract or as subsequently approved by the 
governing body. 
    Subd. 2.  [PARTIAL TAX EXEMPTION.] The governing body of a 
city in which the proposed development is to be located, after 
the approval required by subdivision 3, may exempt from all 
local taxes up to 50 percent of the value of the development 
which represents an increase over the assessed valuation of the 
property, including both land and improvements, acquired for the 
development at the time of its original acquisition for 
redevelopment purposes.  If the governing body grants an 
exemption, the development shall be exempt from any or all 
county and school district ad valorem property taxes to the 
extent of and for the duration of the municipal exemption.  The 
tax exemption shall not operate for a period of more than ten 
years, commencing from the date on which the exemption first 
becomes effective.  No exemption may be granted from payment of 
special assessments or from the payment of inspection, 
supervision, and auditing fees of the authority. 
    The governing body may not approve a tax exemption or a 
development contract for a development unless it finds by 
resolution that (1) the land which is part of the proposed 
development would not, in the foreseeable future, be made 
available for redevelopment in the manner proposed without the 
partial exemption; (2) the development plan submitted by the 
developer will meet a specific housing shortage identified by 
the city or the authority and will afford maximum opportunity, 
consistent with the project plan, for redevelopment of the land 
by private enterprise; and (3) the development plan conforms to 
the project plan as a whole. 
    Subd. 3.  [COMMENT BY COUNTY BOARD.] Before approving a tax 
exemption pursuant to this section, the governing body of the 
city must provide an opportunity to members of the board of 
commissioners of the county in which the proposed development is 
to be located and the members of the school board of the school 
district which the proposed development is to be located to meet 
with the governing body.  The governing body must present to the 
members of those boards its estimate of the fiscal impact of the 
proposed property tax exemption.  The tax exemption may not be 
approved by the governing body until the county board of 
commissioners has presented its written comment on the proposal 
to the governing body, or 30 days have passed since the date of 
the transmittal by the governing body to the board of the 
information on fiscal impact, whichever occurs first. 
    Subd. 4.  [CHANGE IN PROJECT PROHIBITED.] During the period 
of any tax exemption granted pursuant to this section, no 
developer or any approved successor in interest to its title to 
a project or any part thereof may transfer any ownership 
interest in the developer entity or in the project or change any 
feature of a project for which approval of the city is required, 
without the approval of the authority and the approval by the 
local governing body by a majority of the number of the votes 
authorized to be cast by all of the members of the local 
governing body. 
    Subd. 5.  [CONTINUATION OF REDEVELOPMENT COMPANY 
PROVISIONS.] The provisions of Minnesota Statutes 1986, sections 
462.591 to 462.705, shall continue in effect with respect to any 
redevelopment company to which a tax exemption had been granted 
under Minnesota Statutes 1986, section 462.651, prior to August 
1, 1987.  
    Sec. 44.  [469.044] [BOND PENDING LITIGATION.] 
    When any action or proceeding at law or in equity is 
commenced, drawing in question the right, power, or authority of 
a public corporation created and operating under sections 1 to 
47 to do any act or to make or perform any contract or agreement 
or to undertake or enter upon the discharge of any obligations 
or commitments under those statutes, the corporation may, if it 
deems that the pendency of the litigation might directly or 
indirectly impair its borrowing power, increase the cost of its 
projects, or be otherwise injurious to the public interest, move 
the court in which the litigation is pending to require the 
party who instituted the suit to give a surety bond as provided 
in sections 45 to 47. 
    Sec. 45.  [469.045] [APPEARANCE OF PUBLIC CORPORATION; 
BOND.] 
    If the public corporation is not a party to the litigation 
described in section 44 it may appear specially for the purpose 
of making and being heard on such a motion.  Three days' notice 
of hearing on the motion shall be given.  If the court 
determines that loss or damage to the public or taxpayers may 
result from the pendency of the action or proceeding, the court 
may require the party who instituted it to give a surety bond, 
approved by the court or judge, in a penal sum to be determined 
by the court to protect against loss or damage, whether or not a 
temporary injunction or restraining order against the 
corporation has been demanded or ordered.  If the bond so 
ordered is not filed within the reasonable time allowed by the 
court, the action or proceeding shall be dismissed with 
prejudice.  The bond shall be executed by the party who 
instituted the litigation or some person for that party as 
principal and conditioned for the payment to the corporation of 
any damage the public and taxpayers sustain by reason of the 
litigation, if the court finally determines that the party was 
not entitled to the relief sought.  The amount of damages may be 
ascertained by a reference or otherwise as the court shall 
direct, in which case the sureties shall be concluded as to the 
amount but the damages shall be recoverable only in an action on 
the bond.  If the party by or for whom the bond is furnished 
prevails in the litigation, the premium paid on the bond shall 
be repaid by or taxed against the corporation.  During the 
pendency of the litigation, the court, on motion, may require 
additional security if found necessary, and upon failure to 
furnish it shall dismiss the action or proceeding with 
prejudice.  The court may likewise, on motion, reduce the amount 
of a bond theretofore required or release the bond upon a 
showing that the amount is excessive or the bond no longer 
required.  
    Sec. 46.  [469.046] [ADVANCE OF LITIGATION ON CALENDAR.] 
    In any litigation described in sections 44 and 45, in which 
a bond has been required and given or the court has denied a 
motion to require a bond, the court shall advance the case on 
its calendar for trial at the earliest feasible date.  An appeal 
from an appealable order made, or from a judgment entered in a 
district court may be taken after 30 days from entry of the 
judgment or after written notice of the order from the adverse 
party.  
    Sec. 47.  [469.047] [SUIT FOR CIVIL DAMAGES.] 
    Nothing in sections 44 to 47 shall affect the rights of any 
person to bring a suit for civil damages.  No bond shall be 
required in such a suit except as otherwise provided by law. 
    Sec. 48.  [RETROACTIVE EFFECT OF PUBLISHED NOTICE 
PROVISIONS.] 
    Laws 1959, chapter 545, sections 1 to 14, so far as they 
relate to published notice of any public hearings shall operate 
not only prospectively, but retroactively, so as to eliminate 
the necessity of more than one publication of a given hearing, 
if more than one publication is, was, or is claimed to be 
required under Minnesota Statutes, sections 462.415 to 462.705 
and Laws 1959, chapter 545, sections 1 to 19.  All orders, 
resolutions, motions, plans, and agreements and actions taken by 
any municipal housing and redevelopment authority organized, or 
purported to be organized under Minnesota Statutes, sections 
462.415 to 462.705 and Laws 1959, chapter 545, sections 1 to 19, 
and taken or purported to have been taken by any governing body, 
city planning commission, or political subdivision of the state 
or public state body with respect to plans and projects, are 
hereby declared valid and effective. 

                            PORT AUTHORITIES 
    Sec. 49.  [469.048] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 49 to 69, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning. 
    Subd. 2.  [PORT AUTHORITY.] "Port authority" or "authority" 
means a port authority created under section 50 or a special 
law.  "Port authority" includes a seaway port authority.  
    Subd. 3.  [SEAWAY PORT AUTHORITY.] A "seaway port authority"
or a "seaport" is a port authority with jurisdiction over a 
harbor on the Great Lakes-St. Lawrence seaway. 
    Subd. 4.  [PORT DISTRICT.] A "port district" is the total 
area of operations of a port authority. 
    Subd. 5.  [MARGINAL PROPERTY.] "Marginal property" means 
property that suffers from at least one of the conditions in 
this subdivision: 
    (1) faulty planning causing deterioration, disuse, or 
economic dislocation; 
    (2) the subdividing and sale of lots too small and 
irregular for good use and development; 
    (3) lots laid out without regard to their physical 
characteristics and surrounding conditions; 
    (4) inadequate streets, open spaces, and utilities; 
    (5) areas that may flood; 
    (6) lower values, damaged investments, and social and 
economic maladjustment reducing taxpaying capacity to the extent 
that tax receipts are too low to pay for the public services 
rendered; 
    (7) lack of use or improper use of areas, resulting in 
stagnant or unproductive land that could contribute to the 
public health, safety and welfare; 
    (8) lower population and reduction of proper use of areas 
causing more decline, and requiring more public money for new 
public facilities and public services elsewhere; 
    (9) property valuation too low to establish a local 
improvement district to construct and install streets, walks, 
sewers, water and other utilities; 
    (10) lands within an industrial area not used for industry 
but needed for industrial development of the area; and 
    (11) state-acquired tax-forfeited land. 
    Subd. 6.  [CITY.] "City" means a home rule charter or 
statutory city. 
    Sec. 50.  [469.049] [ESTABLISHMENT; CHARACTERISTICS.] 
    Subdivision 1.  [SAINT PAUL, DULUTH; ESTABLISHMENT.] The 
port authority of Saint Paul and the seaway port authority of 
Duluth are established. 
    Subd. 2.  [PUBLIC BODY CHARACTERISTICS.] A port authority 
is a body politic and corporate with the right to sue and be 
sued in its own name. 
    A port authority is a governmental subdivision under 
section 282.01.  
    A port authority carries out an essential governmental 
function of the state when it exercises its power, but the 
authority is not immune from liability because of this. 
    Sec. 51.  [469.050] [COMMISSIONERS; TERMS, VACANCIES, PAY, 
CONTINUITY.] 
    Subdivision 1.  [SAINT PAUL.] The port authority of Saint 
Paul consists of seven commissioners, two of whom must be 
members of the city council.  The mayor shall appoint the 
commissioners with the consent of the city council. 
    Subd. 2.  [DULUTH.] The Seaway Port Authority of Duluth 
consists of seven commissioners:  three appointed by the Duluth 
city council; two by the Saint Louis county board; and two by 
the governor. 
    A member of the Saint Louis county delegation of the state 
House of Representatives appointed by that delegation, and a 
member of the Saint Louis county delegation of the state Senate 
appointed by that delegation are advisory members of the 
authority.  
    Subd. 3.  [OTHER PORT AUTHORITIES.] A port authority 
established under law by a city council of a city other than a 
city of the first class may have three members appointed by the 
city council or seven members appointed as provided in 
subdivision 1, unless a different number or procedure is set out 
in the enabling law.  A three-member authority under this 
subdivision may be increased to a seven-member authority 
appointed as provided under subdivision 1 by resolution of the 
city council.  
    Subd. 4.  [TERM, VACANCIES.] The first commissioners of a 
three-member commission are appointed for initial terms as 
follows:  one for two years; one for four years; and one for six 
years.  The first commissioners of a seven-member commission are 
appointed for initial terms as follows:  one member for a term 
of one, two, three, four, and five years, respectively, and two 
members for terms of six years.  For subsequent terms, the term 
is six years.  A vacancy is created in Saint Paul when a city 
council member of the authority ends council membership and in 
Duluth when a county board member of the authority ends county 
board membership.  A vacancy on any port authority must be 
filled by the appointing authority for the balance of the term 
subject to the same approval and consent, if any, required for 
an appointment for a full term.  For Duluth, if the governor or 
the county board fails to make a required appointment within 60 
days after a vacancy occurs, the city council has sole power to 
appoint a successor.  
    Subd. 5.  [PAY.] A commissioner, including the president, 
must be paid $35 for each regular or special port authority 
meeting attended and shall receive reimbursement for expenses 
incurred while performing duties.  The advisory members of the 
Duluth authority from the legislature must not be paid for their 
service to the authority. 
    Sec. 52.  [469.051] [OFFICERS; DUTIES; ORGANIZATIONAL 
MATTERS.] 
    Subdivision 1.  [BYLAWS, RULES, SEAL.] A port authority may 
adopt bylaws and rules of procedure and shall adopt an official 
seal.  
    Subd. 2.  [OFFICERS.] A port authority shall annually elect 
a president, a vice-president, a treasurer, a secretary, and an 
assistant treasurer.  A commissioner may not serve as president 
and vice-president at the same time.  The other offices may be 
held by one commissioner.  The offices of secretary and 
assistant treasurer need not be held by a commissioner. 
    Subd. 3.  [DUTIES AND POWERS.] The officers have the usual 
duties and powers of their offices.  They may be given other 
duties and powers by the port authority.  
    Subd. 4.  [TREASURER'S DUTIES.] The treasurer: 
    (1) shall receive and is responsible for port authority 
money;  
    (2) is responsible for the acts of the assistant treasurer; 
    (3) shall disburse port authority money by check only;  
    (4) shall keep an account of the source of all receipts, 
and the nature, purpose and authority of all disbursements; and 
    (5) shall file the authority's detailed financial statement 
with its secretary at least once a year at times set by the 
authority.  
    Subd. 5.  [ASSISTANT TREASURER.] The assistant treasurer 
has the powers and duties of the treasurer if the treasurer is 
absent or disabled.  
    Subd. 6.  [TREASURER'S BOND.] The treasurer shall give bond 
to the state conditioned for the faithful discharge of official 
duties.  The bond must be approved as to form and surety by the 
authority and filed with its secretary.  The bond must be for 
twice the amount of money likely to be on hand at any one time, 
as determined at least annually by the authority except that the 
bond must not exceed $300,000.  
    Subd. 7.  [PUBLIC MONEY.] Port authority money is public 
money.  
    Subd. 8.  [CHECKS.] A port authority check must be signed 
by the treasurer and by one other officer named by the authority 
in a resolution.  The check must state the name of the payee and 
the nature of the claim that the check is issued for.  
    Subd. 9.  [FINANCIAL STATEMENT.] The port authority's 
detailed financial statement must show all receipts and 
disbursements, their nature, the money on hand, the purposes to 
which the money on hand is to be applied, the authority's 
credits and assets, and its outstanding liabilities.  The 
authority shall examine the statement together with the 
treasurer's vouchers.  If the authority finds the statement and 
vouchers correct, it shall approve them by resolution and enter 
the resolution in its records. 
    Sec. 53.  [469.052] [DEPOSITORIES; DEFAULT; COLLATERAL.] 
    Subdivision 1.  [NAMED; BOND.] Every two years a port 
authority shall name national or state banks within the state as 
depositories.  Before acting as a depository, a named bank shall 
give the authority a bond approved as to form and surety by the 
authority.  The bond must be conditioned for the safekeeping and 
prompt repayment of deposits.  The amount of the bond must be at 
least equal to the maximum sum expected to be on deposit at any 
one time. 
    Subd. 2.  [DEFAULT; COLLATERAL.] When port authority funds 
are deposited by the treasurer in a bonded depository, the 
treasurer and the surety on the treasurer's official bond are 
exempt from liability for the loss of the deposits because of 
the failure, bankruptcy, or any other act or default of the 
depository.  A port authority may accept assignments of 
collateral from its depository to secure deposits in the same 
manner as assignments of collateral are permitted by law to 
secure deposits of the port authority's city. 
    Sec. 54.  [469.053] [TAX LEVIES; FISCAL MATTERS.] 
    Subdivision 1.  [OBLIGATIONS.] A port authority must not 
levy a tax or special assessment, pledge the credit of the state 
or the state's municipal corporations or other subdivisions, or 
incur an obligation enforceable on property not owned by the 
port authority. 
    Subd. 2.  [BUDGET TO CITY.] Annually, at a time fixed by 
charter, resolution, or ordinance of the city, a port authority 
shall send its budget to its city's council.  The budget must 
include a detailed written estimate of the amount of money that 
the authority expects to need from the city to do authority 
business during the next fiscal year in excess of any expected 
receipts from other sources. 
    Subd. 3.  [FISCAL YEAR.] The fiscal year of a port 
authority must be the same as the fiscal year of its city except 
that the Seaway Port Authority of Duluth may, by resolution, 
adopt a fiscal year different from the city of Duluth's fiscal 
year based on the international shipping season through the St. 
Lawrence Seaway. 
    Subd. 4.  [MANDATORY CITY LEVY.] A city shall, at the 
request of the port authority, levy a tax in any year for the 
benefit of the port authority.  The tax must not exceed .75 mill 
times the assessed valuation of taxable property in the city.  
The tax is not subject to levy limits.  The amount levied must 
be paid by the city treasurer to the treasurer of the port 
authority, to be spent by the authority. 
    Subd. 5.  [REVERSE REFERENDUM.] A city may increase its 
levy for port authority purposes under subdivision 4 only as 
provided in this subdivision.  Its city council must first pass 
a resolution stating the proposed amount of levy increase.  The 
city must then publish the resolution together with a notice of 
public hearing on the resolution for two successive weeks in its 
official newspaper or, if none exists, in a newspaper of general 
circulation in the city.  The hearing must be held two to four 
weeks after the first publication.  After the hearing, the city 
council may decide to take no action or may adopt a resolution 
authorizing the proposed increase or a lesser increase.  A 
resolution authorizing an increase must be published in the 
city's official newspaper or, if none exists, in a newspaper of 
general circulation in the city.  The resolution is not 
effective if a petition requesting a referendum on the 
resolution is filed with the city clerk within 30 days of 
publication of the resolution.  The petition must be signed by 
voters equaling five percent of the votes cast in the city in 
the last general election.  The resolution is effective if 
approved by a majority of those voting on the question.  The 
commissioner of revenue shall prepare a suggested form of 
referendum question.  The referendum must be held at a special 
or general election before October 1 of the year for which the 
levy increase is proposed. 
    Subd. 6.  [DISCRETIONARY CITY LEVY.] Upon request of a port 
authority, the port authority's city may levy a tax to be spent 
by and for its port authority.  The tax must enable the port 
authority to carry out efficiently and in the public interest 
sections 49 to 69 to create and develop industrial development 
districts.  The levy must not be for more than 7/60 of one mill 
on each dollar of assessed valuation of taxable property in the 
city.  The county treasurer shall pay the proceeds of the tax to 
the port authority treasurer.  The money may be spent by the 
authority in performance of its duties to create and develop 
industrial development districts.  In spending the money the 
authority must judge what best serves the public interest.  The 
levy in this subdivision is in addition to the levy in 
subdivision 4 and is not subject to levy limits. 
    Subd. 7.  [COUNTY LEVY.] The county board of a county 
having a port authority city may make an appropriation for the 
use of the port authority and may levy the amount of the 
appropriation in its general revenue levy.  The levy for this 
appropriation is subject to the county's levy limits. 
    Subd. 8.  [ST. LOUIS COUNTY LEVY.] After receiving the 
budget from the seaway port authority, the St. Louis county 
board may annually levy a tax to raise not more than $50,000 for 
the port authority for its operations in the next fiscal year.  
The levy is not subject to county levy limits. 
    Subd. 9.  [OUTSIDE BUDGET LAWS.] Money appropriated to a 
port authority from county taxes under this section is not 
subject to a budget law that applies to the county.  
    Subd. 10.  [COUNTY PAYMENT.] The county treasurer shall pay 
money appropriated or levied by a county under this section when 
and in the manner the county board directs to the port authority 
to be spent by the port authority.  
    Subd. 11.  [PROHIBITION ON USE OF STATE FUNDS.] State 
appropriations or credit of the state must not be used to pay or 
guarantee the payment of the debt of a port authority.  
    Sec. 55.  [469.054] [USE OF CITY PROPERTY, SERVICES BY 
AUTHORITY.] 
    Subdivision 1.  [PROPERTY TRANSFER.] The council of a port 
authority city may transfer or cause to be transferred to its 
port authority any dock, waterfront, or riparian property owned 
or controlled by the city, and located within the port 
district.  The transfer must be approved by majority vote and 
may be with or without consideration.  The city may also put the 
same property in the possession or control of the authority by a 
lease or other agreement for a limited period or in fee.  
Nothing in sections 49 to 69 restricts the city or any 
municipality from owning, developing, using, and improving port 
or terminal facilities. 
    Subd. 2.  [SPACE, SERVICES.] A port authority city may 
furnish offices, warehouses, or other structures and space with 
or without heat, light, and other service to its port 
authority.  The city council may also furnish stenographic, 
clerical, engineering, or other assistance to its port authority.
    Subd. 3.  [COUNSEL.] The city attorney is the legal adviser 
to the port authority.  The port authority may employ additional 
counsel, including a general counsel who is the chief legal 
advisor to the authority. 
    Sec. 56.  [469.055] [POWERS AND DUTIES.] 
    Subdivision 1.  [GENERAL DUTIES.] A port authority shall:  
(1) promote the general welfare of the port district, and of the 
port as a whole; (2) try to increase the volume of the port's 
commerce; (3) promote the efficient, safe, and economical 
handling of the commerce; and (4) provide or promote adequate 
docks, railroad and terminal facilities open to all on 
reasonable and equal terms for the handling, storage, care, and 
shipment of freight and passengers to, from, and through the 
port.  A port authority may carry out its powers and duties 
under sections 49 to 69 at any place in the city.  
    Subd. 2.  [MEET, PLAN, REGULATE, INVESTIGATE, REPORT.] A 
port authority shall: 
    (1) meet with a neighboring state's port authority that 
shares a port or harbor with it and try to agree with that 
authority on a comprehensive plan to regulate, develop, and 
improve the harbor and port; 
    (2) consider and adopt detailed plans for the port district 
consistent with the comprehensive plan in clause (1); 
    (3) meet from time to time with any other state's port 
authority to try to agree with it on legislation and rules 
needed to regulate and control the whole port, and recommend the 
adoption of the legislation and rules to the appropriate 
legislative and regulatory bodies; 
    (4) decide on and recommend legislation and rules needed to 
regulate and improve navigation and commerce in the port 
district; 
    (5) jointly with a similar body, or separately, recommend 
to the proper departments of the federal, state, or local 
government, or to another body, the carrying out of public 
improvements to benefit the port or port district; 
    (6) investigate the practices, rates, and conduct of 
privately owned or operated dock, terminal and port facilities 
in the port district, start proceedings, and take steps in the 
public interest to remedy abuses.  To conduct investigations 
under this clause, a port authority may examine witnesses under 
oath and to do so have subpoenas issued out of the district 
court where it is located.  The subpoenas may require the 
attendance of witnesses and the production of books and 
documents; 
    (7) A seaway port authority may also investigate 
stevedoring and car contractors, ship chandlers, and other 
organizations that a port depends on for its orderly development 
and operation; 
    (8) if necessary, bring suit for any irregularities before 
a proper state or federal court; and 
    (9) annually by April 1 give a detailed written account to 
its city council of its activities, its receipts and 
expenditures during the past calendar year, and other matters 
and recommendations it finds advisable to advance the commerce 
and welfare of the port district.  
    Subd. 3.  [REVENUE POOLING.] A port authority operating 
under this section and also under sections 59 to 69 may deposit 
all its money from any source in one bank account.  
    Subd. 4.  [PUBLIC RELATIONS.] To further an authorized 
purpose a port authority may (1) join an official, industrial, 
commercial, or trade association, or another organization 
concerned with the purpose, (2) have a reception of officials or 
others who may contribute to advance the port district and its 
industrial development, and (3) carry out other public relation 
activities to promote the port district and its industrial 
development.  Activities under this subdivision have a public 
purpose. 
    Subd. 5.  [MINED UNDERGROUND SPACE DEVELOPMENT.] Upon 
delegation by a municipality as provided in section 140, a port 
authority may exercise any of the delegated powers in connection 
with mined underground space development pursuant to sections 
136 to 142. 
    Subd. 6.  [CONTROL OF PROPERTY.] A port authority may 
acquire, purchase, construct, lease, or operate bulkheads, 
jetties, piers, wharves, docks, landing places, warehouses, 
storehouses, elevators, cold storage plants, terminals, bridges, 
or other terminal or transportation facilities.  The authority 
may own, hold, lease, or operate real and personal property.  A 
port authority may lease property in or out of its port district 
if it believes the property is suitable and proper to use to 
carry out its duties and responsibilities.  The facilities and 
the property must be needed or convenient for storing, handling, 
or transporting freight, passenger traffic, and establishing 
rail and water transfer in the port district.  The authority may 
make rules and fix fees for the use of the facilities and for 
the services it renders.  The authority may borrow money and 
secure the loans by mortgages on property held or to be held by 
it or by bonds.  
    Subd. 7.  [SALE OF REALTY.] The authority may sell, convey, 
and exchange any real or personal property owned or held by it 
in any manner and on any terms it wishes.  Real property owned 
by the authority must not be sold, be exchanged, or have its 
title transferred without approval of two-thirds of the 
commissioners.  All commissioners must have ten days' written 
notice of a regular or special meeting at which a sale, 
conveyance, exchange, or transfer of property is to be voted 
on.  The notice must contain a complete description of the 
affected real estate.  The resolution authorizing the real 
estate transaction is not effective unless a quorum is present. 
    Subd. 8.  [CONDEMNATION.] A port authority may acquire 
under eminent domain property of any kind within the port 
district needed by it for public use even if the property was 
acquired by its owner under eminent domain or even if the 
property is already devoted to a public use.  Property vested in 
or held by the state or by a city, county, school district, 
town, or other municipality must not be taken without the 
holder's consent.  The port authority shall adopt a resolution 
describing the property and stating its intended use and the 
necessity of the taking.  
    Subd. 9.  [TUNNELS AND BRIDGES.] A port authority may 
acquire, operate, and maintain an existing toll bridge for 
vehicles across boundary water between a city of the first class 
in the state and another city either in or out of state.  The 
authority may also construct, maintain, and operate another 
vehicular toll bridge with its approaches across the water at a 
point suitable to navigation, and may reconstruct, repair, and 
improve both bridges.  The authority may construct, maintain, 
and operate a tunnel under the water and reconstruct, repair, 
and improve it.  
    A port authority may enter upon lands and acquire, condemn, 
occupy, possess, and use real estate and other property needed 
to locate, construct, operate, and maintain the bridge or tunnel 
and approaches to it.  In doing so, the authority shall act in 
the same manner as a railroad corporation may for railroad 
purposes, or a bridge corporation may for bridge purposes in the 
state where the property is after making just compensation for 
the property as decided and paid under the laws of that state.  
The proceedings must be the same as for condemnation in that 
state.  
    Subd. 10.  [SURVEYS; PLANS.] A port authority may survey or 
investigate the proper uses, operations, improvement, and 
development of the port district, the resulting stimulation of 
employment, and the benefit to the port district's city, county, 
and state.  The port authority may also prepare a plan to 
construct, develop, and improve the port in the future.  The 
plan may be merged with existing or future plans of any city in 
the port district.  After public hearing, the port authority may 
adopt a plan as its official plan for the port district.  Then 
the plan may be extended, modified, or amended only after a 
hearing.  When the plan is adopted, all improvements made by the 
port authority must be consistent with it.  
    Subd. 11.  [TERMINAL OPERATORS FOR SEAWAY PORT.] A seaway 
port authority may operate its port terminal facilities on its 
premises as terminal operators.  If it does so, the authority 
may contract with a warehouse operator performing other terminal 
services to act as its agent.  The contract may provide:  (1) 
that the agent will be paid on a monthly basis to operate the 
facilities; (2) that the agent may hire the necessary personnel 
to carry out the functions undertaken by the contract; (3) that 
employees engaged by the agent are employees of the agent and 
not of the port authority; and (4) that the agent is responsible 
to pay the employees and to comply with local ordinances and 
state and federal laws affecting the employees.  The seaway port 
authority may also contract with agents to perform any function 
that the port authority may do.  The seaway port authority may 
retain power to set rates for a service to be performed in a 
terminal facility owned, leased, or operated by it. 
    Sec. 57.  [469.056] [EMPLOYEES; CONTRACTS; AUDITS.] 
    Subdivision 1.  [EMPLOYEES, SOCIAL SECURITY.] A port 
authority may employ or contract for the engineering, legal, 
technical, clerical, stenographic, accounting, and other 
assistance it considers advisable.  An employee of a port 
authority under this chapter is an "employee" under section 
355.01, subdivision 4, and by appropriate action of the port 
authority is entitled to benefits under that section.  
    Subd. 2.  [CONTRACTS.] A port authority may contract to 
erect, repair, maintain or operate docks, warehouses, terminals, 
elevators, or other structures on or in connection with property 
it owns or controls.  The authority may contract or arrange with 
the federal government, or any of its departments, with persons, 
public corporations, the state, or any of its political 
subdivisions, commissions, or agencies, for separate or joint 
action, on any matter related to using the authority's powers or 
doing its duties.  The authority may contract to purchase and 
sell real and personal property.  An obligation or expense must 
not be incurred unless existing appropriations together with the 
reasonably expected revenue of the port authority from other 
sources are sufficient to discharge the obligation or pay the 
expense when due.  The state and its municipal subdivisions are 
not liable on the obligations. 
    Subd. 3.  [DULUTH; AUDITS.] A seaway port authority may 
employ a certified public accountant to annually examine and 
audit its books.  The report of the exam and audit must be sent 
to the state auditor.  The state auditor shall review the report 
and may accept it or in the public interest examine the books 
further. 
    Subd. 4.  [COMPLIANCE EXAMINATIONS.] At the request of the 
city or upon the auditor's initiative, the state auditor may 
make a legal compliance examination of the authority for that 
city.  Each authority examined must pay the total cost of the 
examination, including the salaries paid to the examiners while 
actually engaged in making the examination.  The state auditor 
may bill monthly or at the completion of the audit.  All 
collections received must be deposited in the revolving fund of 
the state auditor.  
    Subd. 5.  [AUDITS.] The financial statements of the 
authority must be prepared, audited, filed, and published or 
posted in the manner required for the financial statements of 
the city that established the authority.  The financial 
statements must permit comparison and reconciliation with the 
city's accounts and financial reports.  The report must be filed 
with the state auditor by June 30 of each year.  The auditor 
shall review the report and may accept it or, in the public 
interest, audit the books of the authority. 
    Sec. 58.  [469.057] [PORT CONTROL BY OTHERS; PETITION; 
INTERVENTION.] 
    Subdivision 1.  [REGULATION.] Unless otherwise provided by 
law, all laws now or hereafter vesting jurisdiction or control 
in the department of public service of the state of Minnesota, 
the Interstate Commerce Commission or Department of Defense of 
the United States, or similar regulatory bodies shall apply to 
any transportation, terminal, or other facility owned, operated, 
leased, or controlled by the port authority with the same force 
and effect as if the transportation, terminal, or other facility 
were owned, operated, leased, or controlled by a private 
corporation. 
    Subd. 2.  [SEAPORT CONTROL LIMITED.] The department of 
public service has no jurisdiction over a seaway port authority 
for the following matters to the extent they are connected with 
handling interstate commerce: 
    (1) charges for stevedoring of vessels; 
    (2) receiving and delivering cargo for vessels; 
    (3) car and truck unloading and loading cargo for vessels; 
    (4) watching cargo for vessels; 
    (5) charges to vessels for use of facilities; 
    (6) charges against railroad, trucking companies or 
shippers for use of facilities; and 
    (7) delivery and warehouse charges for cargo to and from 
and in warehouses on seaway port authority property. 
    Subd. 3.  [PETITIONS, INTERVENTION.] A port authority may 
petition a public body of any kind or level having jurisdiction 
of the matter, for any relief, rates, rule, or action that the 
port authority believes will improve the handling of commerce in 
and through the port or improve terminal and transportation 
facilities in the port.  The port authority may join with 
another authority sharing its port in making the petition.  A 
port authority also may intervene before any public body in a 
proceeding affecting the commerce of the port.  In the 
proceeding, the port authority is one of the official 
representatives of the port district along with other interested 
persons. 
    Sec. 59.  [469.058] [INDUSTRIAL DEVELOPMENT DISTRICTS.] 
    Subdivision 1.  [CREATION; NOTICE; FINDINGS.] A port 
authority may create and define the boundaries of industrial 
development districts in their port districts after holding a 
public hearing on the matter.  At least ten days before the 
hearing, the authority shall publish notice of the hearing in a 
daily newspaper of general circulation in the port district.  
The development district may be created if the authority finds 
that a development district is proper and desirable to establish 
and develop a system of harbor and river improvements and 
industrial developments in its port district.  In this section, 
"development" includes redevelopment, and "developing" includes 
redeveloping.  
    Subd. 2.  [POLICY.] It is state policy in the public 
interest to have a port authority exercise the power of eminent 
domain, and advance and spend public money for the purposes in 
sections 49 to 69, and to provide the means to develop marginal 
property according to the findings in subdivision 3.  
    Subd. 3.  [FINDINGS.] The legislature makes the findings in 
this subdivision about the purposes of this section. 
    (a) Sound development of the economic security of the 
people in port authority cities depends on proper development of 
marginal property.  The general welfare of the residents of port 
districts requires remedies for the injurious conditions of 
marginal property by appropriate means. 
    (b) Marginal property cannot be developed without public 
participation and assistance in:  (1) acquiring land, (2)  
planning, (3) financing of land assembly in the work of 
clearance and development, and (4) making necessary improvements 
for developing.  
     When the development of marginal property cannot be done by 
private enterprise alone, it is in the public interest to 
exercise the power of eminent domain, to advance and spend 
public money, and to provide the means to develop marginal 
property.  
    (c) The decline of marginal lands often cannot be reversed 
except by developing all or most of those lands.  Private 
development may be uneconomic and practically impossible because 
of costs and lack of legal power.  The public may have to 
acquire sizable areas of marginal property at fair prices to 
remedy the conditions on the marginal property, and to develop 
the areas under proper supervision, with appropriate planning 
and continuing land use.  The development of land acquired under 
sections 49 to 69 is a public necessity and use and a 
governmental function.  The sale or lease of the land after 
development is incidental to the real purpose:  to remove the 
condition making the property marginal.  
    (d) The development of marginal property and its continuing 
use are public uses, public purposes, and government functions 
that justify spending or advancing public money and acquiring 
private property.  The development is a state concern in the 
interest of health, safety and welfare of the people of the 
state and of all residents and property owners in communities 
having marginal property.  Marginal property causes problems 
beyond control of police power alone.  
    Sec. 60.  [469.059] [DEVELOPMENT DISTRICT POWERS.] 
    Subdivision 1.  [IN GENERAL.] A port authority, or a city 
authorized by law to exercise the powers of a port authority may 
use the powers in this section for the purposes in section 59, 
subdivision 1.  
    Subd. 2.  [ACQUIRE PROPERTY.] The port authority may 
acquire by lease, purchase, gift, devise, or condemnation 
proceedings the needed right, title and interest in property to 
create industrial development districts.  A port authority may 
lease property in or out of its port district if it believes the 
property is suitable and proper to use to carry out its duties 
and responsibilities.  It shall pay for the property out of 
money it receives under sections 60 to 69.  It may hold and 
dispose of the property subject to the limits and conditions in 
sections 50, 51, and 59 to 69.  The title to property acquired 
by condemnation or purchase must be in fee simple, absolute.  
The port authority may accept an interest in property acquired 
in another way subject to any condition of the grantor or donor.
The condition must be consistent with the proper use of the 
property under sections 50, 51, and 59 to 69.  Property 
acquired, owned, leased, controlled, used, or occupied by the 
port authority for any of the purposes of this section is for 
public governmental and municipal purposes and is exempt from 
taxation by the state or by its political subdivisions.  The 
exemption applies only while the port authority holds property 
for its own purpose.  When property is sold it begins to be 
taxed again.  
    Subd. 3.  [OPTIONS.] The port authority may sign options to 
purchase, sell, or lease property.  
    Subd. 4.  [EMINENT DOMAIN.] The port authority may exercise 
the right of eminent domain under chapter 117, or under its 
city's charter to acquire property it is authorized to acquire 
by condemnation.  The port authority may acquire in this way 
property acquired by its owner by eminent domain or property 
already devoted to a public use only if its city's council 
approves.  The port authority may take possession of property to 
be condemned after it files a petition in condemnation 
proceedings describing the property.  The authority may abandon 
the condemnation before taking possession.  
    Subd. 5.  [CONTRACTS.] The port authority may make 
contracts for an industrial development purpose within the 
powers given it in sections 50, 51, and 59 to 69. 
    Subd. 6.  [PARTNER.] The port authority may be a limited 
partner.  
    Subd. 7.  [RIGHTS; EASEMENTS.] The port authority may 
acquire rights or an easement for a term of years or perpetually 
for development of an industrial district. 
    Subd. 8.  [SUPPLIES; MATERIALS.] The port authority may buy 
the supplies and materials it needs to carry out this section.  
    Subd. 9.  [RECEIVE PUBLIC PROPERTY.] The port authority may 
accept land, money, or other assistance, whether by gift, loan 
or otherwise, in any form from the federal or state government, 
or an agency of either, or a local subdivision of state 
government to carry out sections 49 to 69 and to acquire and 
develop an industrial development district and its facilities 
under this section.  
    Subd. 10.  [TAX-FORFEITED LAND.] The port authority may use 
the power of a governmental subdivision under section 282.01 to 
acquire land for and develop an industrial development 
district.  The authority may exercise the power of a city of the 
first class under that section to acquire land forfeited to the 
state for nonpayment of taxes. 
    Subd. 11.  [PROCEDURE.] Tax-forfeited lands in an 
industrial development district that are vested in the state 
shall be conveyed to the port authority that is developing the 
district for one dollar per tract.  The port authority may use 
and later resell the land for purposes of sections 49 to 69.  
    In conveying tax-forfeited land to a port authority, the 
state may not retain a possibility of reverter or right of 
reentry as it does under section 282.01, subdivision 1.  
    The commissioner of revenue shall convey tax-forfeited 
parcels in an industrial development district to the port 
authority, if the authority petitions for conveyance under 
sections 49 to 69 and pays one dollar per tract.  
    The attorney general shall approve the form of the deed of 
conveyance.  The port authority shall receive absolute title to 
the tract, subject only to a reservation of minerals and mineral 
rights, under section 282.12.  The deed of conveyance must not 
contain a restriction on the use of the premises.  The 
conveyance divests the state of all further right, title, claim 
or interest in the tracts, except for the reservation of 
minerals and mineral rights.  
    Subd. 12.  [DEVELOPMENT DISTRICT POWER.] The port authority 
may sell or lease land held by it for river, harbor or 
industrial development in industrial development districts.  The 
authority may, if in the public interest, build suitable 
buildings or structures on land owned by it.  The authority may 
furnish capital equipment to be located permanently or used 
exclusively on the lands or in the buildings if necessary to the 
purposes of the buildings or structures.  The port authority 
must intend that the buildings, structures, and equipment be 
leased or sold to private persons to further develop the 
industrial district.  
    The authority may acquire, develop, sell, or lease single 
or multiple tracts of land regardless of size, to be developed 
as a part of the industrial development of the district under 
sections 49 to 69.  
    Subd. 13.  [TAX INCREMENT.] The port authority may request 
that the county auditor of the county of its industrial 
development district certify the latest assessed valuation of 
the legally described taxable real property in the request or of 
all the taxable real property in the district.  The auditor 
shall make the certification.  Valuation that is contributed to 
an areawide tax base under chapter 473F must be excluded from 
the certification.  Each year the auditor shall certify to the 
authority the amounts and percentages of increase or decrease in 
the certified valuation.  The part of the change that is 
contributed to an areawide tax base under chapter 473F must be 
excluded. 
    The auditor shall compute the mill rates of taxes against 
the original certified valuation.  The auditor shall also extend 
the rates against any increased valuation.  The auditor shall 
then send the resulting tax increment to the port authority.  
The procedure to be used for computing and sending the 
increments is provided in section 42, subdivisions 2 and 3. 
    The port authority shall keep tax increments received for a 
district in a special account on its official books and records. 
    The auditor shall send the tax increments to the port 
authority until the cost, including interest, of redevelopment 
of the marginal property within the district has been fully 
reimbursed.  The port authority shall report to the auditor when 
the cost is fully reimbursed.  After that the auditor shall 
compute and extend the tax mill rates against the entire 
assessed valuation of the property and send the taxes to all 
taxing districts.  The city council may direct that part or all 
of the tax collected from the property be pledged and 
appropriated to pay general obligation bonds of the authority.  
After the auditor has certified the base valuation used to 
compute tax increments and while the tax increment is kept in a 
separate account, the auditor must not include increases in the 
valuation of the property in the assessed valuation of a taxing 
district to compute its debt or levy limit or to compute the 
amount of its state or federal aid.  This subdivision applies to 
projects for which the port authority requested a certification 
on the project before August 2, 1979. 
    Subd. 14.  [FOREIGN TRADE ZONE.] The port authority may 
apply to the board defined in United States Code, title 19, 
section 81a, for the right to use the powers provided in United 
States Code, title 19, sections 81a to 81u.  If the right is 
granted, the authority may use the powers.  One authority may 
apply with another port authority. 
    Subd. 15.  [EXTENSION OF OTHER AUTHORITIES' POWERS.] The 
port authority may exercise powers and duties of a redevelopment 
agency under sections 153 to 166, for a purpose in sections 1 to 
47 or 49 to 69.  The port authority may also exercise the powers 
and duties in sections 1 to 47 and 49 to 69, for a purpose in 
sections 153 to 166. 
    Subd. 16.  [PARKING AND OTHER FACILITIES.] The port 
authority may operate and maintain a public parking or other 
public facility to promote development in a development district.
    Sec. 61.  [469.060] [GENERAL OBLIGATION BONDS.] 
    Subdivision 1.  [POWER; PROCEDURE.] A port authority may 
issue bonds in the principal amount authorized by its city's 
council.  The bonds may be issued in anticipation of income from 
any source.  The bonds may be issued:  (1) to secure funds 
needed by the authority to pay for acquired property or (2) for 
other purposes in sections 50, 51, and 59 to 69.  The bonds must 
be in the amount and form and bear interest at the rate set by 
the city council.  The authority shall sell the bonds to the 
highest bidder.  The authority shall publish notice of the time 
and the place for receiving bids once at least two weeks before 
the bid deadline.  Except as otherwise provided in sections 49 
to 69, the issuance of the bonds is governed by chapter 475.  
The port authority when issuing the bonds is a municipal 
corporation under chapter 475.  Notwithstanding any contrary 
city charter provision or any general or special law, the bonds 
may be issued and sold without submission of the question to the 
electors of the city, provided that the ordinance of the 
governing body of the city authorizing issuance of the bonds by 
the port authority shall be subject to any provisions in the 
city charter pertaining to the procedure for referendum on 
ordinances enacted by the governing body. 
    Subd. 2.  [OUTSIDE DEBT LIMIT.] Bonds issued by the port 
authority must not be included in the net debt of its city. 
Money received under this section must not be included in a per 
capita limit on taxing or spending in the port authority's 
city's charter.  The authority is also exempt from the limit.  
    Subd. 3.  [DETAIL; MATURITY.] The port authority with the 
consent of its city's council shall set the date, denominations, 
place of payment, form and details of the bonds.  The bonds must 
mature serially.  The first installment must be due in not more 
than three years and the last in not more than 30 years from the 
date of issuance.  
    Subd. 4.  [SIGNATURES; COUPONS; LIABILITY.] The bonds must 
be signed by the president of the port authority, be attested by 
its secretary, and be countersigned by its treasurer.  The 
interest coupons must be attached to the bonds.  The coupons 
must be executed and authenticated by the printed, engrossed or 
lithographed facsimile signature of the port authority's 
president and secretary.  The bonds do not impose any personal 
liability on a member of the port authority. 
    Subd. 5.  [PLEDGE.] The bonds must be secured by the pledge 
of the full faith, credit and resources of the issuing port 
authority's city.  The port authority may pledge the full faith, 
credit and resources of the city only if the city specifically 
authorizes the authority to do so.  The city council must first 
decide whether the issuance of the bonds by the authority is 
proper in each case and if so, the amount of bonds to issue.  
The city council shall give specific consent in an ordinance to 
the pledge of the city's full faith, credit and resources.  The 
port authority shall pay the principal amount of the bonds and 
the interest on it from taxes levied under this section to make 
the payment or from authority income from any source.  
    Subd. 6.  [TAX LEVY.] A port authority that issues bonds 
under this section, shall, before issuing them, levy a tax for 
each year on the taxable property in the authority's city.  The 
tax must be for at least five percent more than the amount 
required to pay the principal and interest on the bonds as the 
principal and interest mature.  The tax must be levied annually 
until the principal and interest are paid in full.  After the 
bonds have been delivered to the purchasers, the tax may not be 
repealed until the debt is paid.  After the bonds are issued, 
the port authority need not take any more action to authorize 
extending, assessing and collecting the tax.  The authority's 
secretary shall immediately send a certified copy of the levy to 
the county auditor, together with full information on the bonds 
for which the tax is levied.  The county auditor shall extend 
and assess the levied tax annually until the principal and 
interest are paid in full.  The port authority shall transfer 
the surplus from the excess levy in this section to a sinking 
fund after the principal and interest for which the tax was 
levied and collected is paid.  The port authority may direct its 
secretary to send a certificate to the county auditor before 
October 15 in a year.  The certificate must state how much 
available income, including the amount in the sinking fund, the 
authority will use to pay principal or interest or both on each 
specified issue of the authority's bonds.  The auditor shall 
then reduce the bond levy for that year by that amount.  The 
port authority shall then set aside the certified amount and may 
not use it for any purpose except to pay the principal and 
interest on the bonds.  The taxes in this section shall be 
collected and sent to the port authority by the county treasurer 
as provided in chapter 276.  The taxes must be used only to pay 
the bonds when due.  
    Subd. 7.  [AUTHORIZED SECURITIES.] Bonds legally issued 
under this chapter are authorized securities under section 
50.14.  A savings bank, trust company, or insurance company may 
invest in them.  A public or municipal corporation may invest 
its sinking funds in them.  The bonds may be pledged by a bank 
or trust company as security for the deposit of public money in 
place of a surety bond. 
    The authority's bonds are instrumentalities of a public 
governmental agency. 
    Sec. 62.  [469.061] [REVENUE BONDS; PLEDGE; COVENANTS.] 
    Subdivision 1.  [POWER.] A port authority may decide by 
resolution to issue its revenue bonds either at one time or in 
series from time to time.  The revenue bonds may be issued to 
provide money to pay to acquire land needed to operate the 
authority, to purchase, construct, install, or furnish capital 
equipment to operate a port terminal, transportation, or 
industrial facility of any kind in its port district, or to pay 
to extend, enlarge, or improve a project under its control.  The 
issued bonds may include the amount the authority considers 
necessary to establish an initial reserve to pay principal and 
interest on the bonds.  The port authority shall state in a 
resolution how the bonds and their attached interest coupons are 
to be executed.  
    Subd. 2.  [FORM.] The bonds of each series issued by the 
port authority under this section shall bear interest at a rate 
or rates, shall mature at the time or times within 30 years from 
the date of issuance, and shall be in such form, whether payable 
to bearer, registrable as to principal, or fully registrable, as 
determined by the port authority.  Section 61, subdivision 7, 
shall apply to all bonds issued under this section, and the 
bonds and their coupons, when payable to bearer, shall be 
negotiable instruments. 
    Subd. 3.  [SALE.] The sale of revenue bonds issued by the 
port authority shall be at public or private sale.  The bonds 
may be sold in the manner and for the price that the port 
authority determines to be for the best interest of the port 
authority.  The bonds may be made callable, and if so issued may 
be refunded. 
    Subd. 4.  [AGREEMENTS.] The port authority may by 
resolution make an agreement or covenant with the bondholders or 
their trustee if it determines that the agreement or covenant is 
needed or desirable to carry out the powers given to the 
authority under this section and to assure that the revenue 
bonds are marketable and promptly paid. 
    Subd. 5.  [REVENUE PLEDGE.] In issuing bonds under sections 
50, 51, and 59 to 69, the port authority may secure the payment 
of the principal and interest on the bonds by a pledge of and 
lien on port authority revenue.  The revenue must come from the 
facility to be acquired, constructed, or improved with the bond 
proceeds or from other facilities named in the bond-authorizing 
resolutions.  The authority also may secure the payment with its 
promise to impose, maintain, and collect enough rentals, rates 
and charges, for the use and occupancy of the facilities and for 
services furnished in connection with the use and occupancy, to 
pay its current expenses to operate and maintain the named 
facilities, and to produce and deposit sufficient net revenue in 
a special fund to meet the interest and principal requirements 
of the bonds, and to collect and keep any more money required by 
the resolutions.  The authority shall decide what constitutes 
"current" expense under this subdivision based on what is normal 
and reasonable under generally accepted accounting principles.  
Revenues pledged by the port authority must not be used or 
pledged for any other port authority purpose or to pay any other 
bonds issued under this section or under section 61, unless the 
other use or pledge is specifically authorized in the 
bond-authorizing resolutions. 
    Subd. 6.  [NOT CITY DEBT.] Revenue bonds issued under this 
section are not a debt of the port authority's city nor a pledge 
of that city's full faith and credit.  The bonds are payable 
only from project revenue as described in this section.  A 
revenue bond must contain on its face a statement to the effect 
that the port authority and its city do not have to pay the bond 
or the interest on it except from revenue and that the faith, 
credit, and taxing power of the city are not pledged to pay the 
principal of or the interest on the bond. 
    Subd. 7.  [NOT APPLICABLE.] Sections 154, subdivision 2, 
paragraph (e), and 155, subdivisions 3, 4, and 5, do not apply 
to revenue bonds issued under this section and sections 153 to 
166 if the interest on the revenue bonds is subject to both 
state and federal income tax or if the revenue bond proceeds are 
not loaned by the port authority to a private person.  
    Sec. 63.  [469.062] [OTHER BONDS.] 
    Subdivision 1.  [CITY BONDS, GENERALLY.] A port authority 
city except the city of Duluth may issue bonds and appropriate 
bond proceeds to purchase, construct, extend, improve, and 
maintain docks, warehouses, or other port or terminal facilities 
owned or to be owned or operated by its port authority.  This 
action may be taken in the same manner as if the facilities were 
public utility plants, needed public buildings and public 
conveniences capable of producing revenue, and were owned or to 
be owned or operated solely by the city. 
    Subd. 2.  [DULUTH BONDS.] The city of Duluth may issue not 
more than $1,000,000 of its general obligation bonds and may 
appropriate the bond proceeds for any of the purposes in 
subdivision 1 and to conserve, develop, reclaim, protect, and 
improve lands under the jurisdiction of its seaway port 
authority.  The bonds shall be issued only after approval of 
two-thirds of the members of the city council.  The bonds shall 
be issued, sold and secured under sections 475.60 to 475.73.  
The bonds are valid without an election. 
    Subd. 3.  [SEAPORT BONDS.] A seaway port authority may 
issue and sell its negotiable revenue bonds for a purpose in 
section 56, subdivision 6, or for a purpose in this chapter 
related to the development of a seaport.  The bonds must be 
issued, sold, and secured in the same manner as the bonds in 
subdivision 5 except that a trust indenture may but need not be 
executed.  The bond resolutions and indenture, if any, must list 
the facilities whose net revenues are to be pledged for the bond 
and interest payments.  The authority may mortgage some or all 
of its facilities, except a tunnel or bridge for vehicles, 
including additions and improvements, to a trustee for the 
bondholders.  The mortgaged facilities may include those 
financed by the bonds, those operated by the authority, or those 
leased to others.  The authority may agree to covenants and 
restrictions about:  (1) issuing more bonds payable from net 
revenues of the same facilities, (2) changes to the bond 
resolutions or the indenture, (3) the remedies and priorities of 
the bondholders in case of default and, (4) anything else about 
the security of the bonds that the authority decides is needed 
to best market the bonds.  
    Subd. 4.  [ST. LOUIS COUNTY BONDS.] When two-thirds of the 
members of the city council of the city of Duluth approve 
issuance of general obligation bonds of the city, the proceeds 
of which are to be appropriated to the seaway port authority, 
the board of St. Louis county commissioners may by five-sevenths 
vote issue general obligation bonds of the county.  The bonds 
may be issued in an amount not to exceed $4,000,000, and the 
proceeds appropriated to be used by the seaway port authority 
for any or all of the purposes specified in section 63, 
subdivision 2, if the county board by resolution determines that 
the conservation, development, reclamation, protection and 
improvement of lands under the jurisdiction of the port 
authority and the construction of port facilities thereon will 
promote the public welfare of the county at large and the 
economic well-being of its people, industries and commerce, and 
is an essential governmental function of the county, and can 
best be performed through the medium of the port authority.  The 
bonds shall be issued, sold and secured as provided in sections 
475.60 to 475.753; the bonds are valid without an election.  
    Subd. 5.  [TUNNEL AND BRIDGE BONDS.] The authority may 
issue and sell its negotiable revenue bonds for the purposes of 
section 56, subdivision 9.  The bonds must be authorized by port 
authority resolutions containing the customary provisions about 
the form of the bonds and their maturity, interest rate, sinking 
fund, redemption, and refunding.  The bonds must be issued under 
a trust indenture from the port authority to a corporate 
trustee.  The indenture must contain the customary provisions as 
to:  (1) the issuance of bonds; (2) the application of the 
revenues of the bridge or tunnel to create a sinking fund to pay 
the bonds and interest on them; (3) the holding of the proceeds 
of the bonds in a special trust to acquire or construct the 
bridge or tunnel; and (4) the pledge and assignment by the port 
authority to the trustee of the bridge or tunnel revenues in 
excess of the cost of operation and maintenance of it as 
security for the payment of the principal of and interest on the 
bonds.  The port authority shall collect tolls for transit over 
the bridge or through the tunnel acquired or constructed under 
this section sufficient at all times to pay for its operation 
and maintenance and to pay the principal of and interest on the 
bonds issued under this subdivision.  The bonds and the coupons 
showing interest on them are an irrevocable contract between the 
bondholders and the port authority that the tolls shall always 
be sufficient for those purposes.  The bonds must not bear 
interest at more than eight percent per year.  The bonds must 
not be sold for less than par plus accrued interest to the date 
of delivery and payment and may be sold at private sale without 
publishing prior notice of the sale.  Bonds issued under this 
subdivision are not a debt of the port authority's city, are not 
subject to the city's debt limit, and are not payable from city 
property taxes.  The bonds are payable solely from the toll 
revenues earned by the bridge or tunnel and pledged to the 
payment of the bonds.  
    Sec. 64.  [469.063] [SECTIONS THAT APPLY IF FEDERAL LIMIT 
APPLIES.] 
    Sections 474A.01 to 474A.21 apply to obligations issued 
under sections 49 to 69 that are limited by a federal volume 
limitation act as defined in section 474A.02, subdivision 9, or 
existing federal tax law as defined in section 474A.02, 
subdivision 8. 
    Sec. 65.  [469.064] [PORT AUTHORITY ACTIVITIES.] 
    Subdivision 1.  [GOVERNMENT AGENT.] A port authority may 
cooperate with or act as agent for the federal or the state 
government, or a state public body, or an agency or 
instrumentality of a government or a public body to carry out 
sections 49 to 69 or any other related federal, state or local 
law in the area of river, harbor and industrial development 
district improvement. 
    Subd. 2.  [STUDIES, ANALYSIS, RESEARCH.] A port authority 
may study and analyze industrial development needs in its port 
district, and ways to meet the needs.  A port authority may 
study the desirable patterns for industrial land use and 
community growth and other factors affecting local industrial 
development in the district and make the result of the studies 
available to the public and to industry in general.  A port 
authority may engage in research and disseminate information on 
river, harbor and industrial development in the port district. 
    Subd. 3.  [ACCEPT PUBLIC LAND.] A port authority may accept 
conveyances of land from all other public agencies, commissions 
or other units of government, including the housing and 
redevelopment authority of the city of Saint Paul and the state 
metropolitan airports commission, if the land can be properly 
used by the port authority in a river, harbor and industrial 
development district, to carry out the purposes of sections 49 
to 69. 
    Subd. 4.  [INDUSTRIAL DEVELOPMENT.] A port authority may 
carry out the law on industrial development districts to develop 
and improve the lands in an industrial development district to 
make it suitable and available for industrial uses and 
purposes.  A port authority may dredge, bulkhead, fill, grade 
and protect the property and do anything necessary and 
expedient, after acquiring the property, to make it suitable and 
attractive as a tract for industrial development.  A port 
authority may lease some or all of its lands or property and may 
set up local improvement districts in all or part of an 
industrial development district. 
    In general, with respect to an industrial development 
district, a port authority may use all the powers given a port 
authority by law. 
    Subd. 5.  [LOANS IN ANTICIPATION OF BONDS.] A port 
authority after authorizing bonds under section 61 or 62 may 
borrow to provide money immediately required for the bond 
purpose.  The loans may not exceed the amount of the bonds.  The 
authority shall by resolution decide the terms of the loans.  
The loans must be evidenced by negotiable notes due in not more 
than 12 months from the date of the loan payable to the order of 
the lender or to bearer, to be repaid with interest from the 
proceeds of the bonds when the bonds are issued and delivered to 
the bond purchasers.  The loan must not be obtained from any 
commissioner of the port authority or from any corporation, 
association, or other institution of which a port authority 
commissioner is a stockholder or officer. 
    Subd. 6.  [USE OF PROCEEDS.] The proceeds of obligations 
issued by a port authority under section 62 and temporary loans 
obtained under subdivision 5 may be used to make or purchase 
loans for port, industrial or economic facilities that the 
authority believes will require financing.  To make or purchase 
the loans, the port authority may enter into loan and related 
agreements, both before and after issuing the obligations, with 
persons, firms, public or private corporations, federal or state 
agencies, and governmental units under terms and conditions the 
port authority considers appropriate.  A governmental unit in 
the state may apply, contract for and receive the loans.  
chapter 475 does not apply to the loans. 
    Sec. 66.  [469.065] [SALE OF PROPERTY.] 
    Subdivision 1.  [POWER.] A port authority may sell and 
convey property owned by it within a port or industrial district 
if it determines that the sale and conveyance are in the best 
interests of the district and its people, and that the 
transaction furthers its general plan of port improvement, or 
industrial development, or both.  This section is not limited by 
other law on powers of port authorities.  
    Subd. 2.  [NOTICE; HEARING.] A port authority shall hold a 
hearing on the sale.  At the hearing a taxpayer may testify for 
or against the sale.  At least ten, but not more than 20, days 
before the hearing the authority shall publish notice of the 
hearing on the proposed sale in a newspaper.  The newspaper must 
be published and of general circulation in the port authority's 
county and port district.  The notice must describe the property 
to be sold and state the time and place of the hearing.  The 
notice must also state that the public may see the terms and 
conditions of the sale at the authority's office and that at the 
hearing the authority will meet to decide if the sale is 
advisable.  
    Subd. 3.  [DECISION; APPEAL.] The port authority shall make 
its findings and decision on whether the sale is advisable and 
enter its decision on its records within 30 days of the 
hearing.  A taxpayer may appeal the decision by filing a notice 
of appeal with the district court in the port or industrial 
district's county and serving the notice on the secretary of the 
port authority, within 20 days after the decision is entered.  
The only ground for appeal is that the action of the authority 
was arbitrary, capricious, or contrary to law.  
    Subd. 4.  [TERMS.] The terms and conditions of sale of the 
property must include the use that the bidder will be allowed to 
make of it.  The authority may require the purchaser to file 
security to assure that the property will be given that use.  In 
deciding the sale terms and conditions the port authority may 
consider the nature of the proposed use and the relation of the 
use to the improvement of the harbor, the riverfront and the 
port authority's city and the business and the facilities of the 
port authority in general.  The sale must be made on the port 
authority's terms and conditions.  The port authority may 
publish an advertisement for bids on the property at the same 
time and in the same manner as the notice of hearing required in 
this section.  The authority may award the sale to the bid 
considered by it to be most favorable considering the price and 
the specified intended use.  The port authority also may sell 
the property at private sale at a negotiated price if after its 
hearing the authority considers that sale to be in the public 
interest and to further the aims and purposes of sections 49 to 
69. 
    Subd. 5.  [ONE-YEAR DEADLINE.] Within one year from the 
date of purchase, the purchaser shall devote the property to its 
intended use or begin work on the improvements to the property 
to devote it to that use.  If the purchaser fails to do so, the 
port authority may cancel the sale and title to the property 
shall return to it.  The port authority may extend the time to 
comply with a condition if the purchaser has good cause.  The 
terms of sale may contain other provisions that the port 
authority considers necessary and proper to protect the public 
interest.  A purchaser must not transfer title to the property 
within one year of purchase without the consent of the port 
authority.  
    Subd. 6.  [COVENANT RUNNING WITH THE LAND.] A sale made 
under this section must incorporate in the deed as a covenant 
running with the land the conditions of sections 49 to 69 
relating to the use of the land.  If the covenant is violated 
the authority may declare a breach of the covenant and seek a 
judicial decree from the district court declaring a forfeiture 
and a cancellation of the deed.  
    Subd. 7.  [PLANS; SPECIFICATIONS.] A conveyance must not be 
made until the purchaser gives the port authority plans and 
specifications to develop the property sold.  The port authority 
must approve the plans and specifications in writing.  The port 
authority may require preparation of final plans and 
specifications before the hearing on the sale.  
    Sec. 67.  [469.066] [ADVANCES BY PORT AUTHORITY.] 
    A port authority may advance its general fund money or its 
credit, or both, without interest, for the objects and purposes 
of sections 59 to 69.  The advances must be repaid from the sale 
or lease, or both, of developed or redeveloped lands.  If the 
money advanced for the development or redevelopment was obtained 
from the sale of the port authority's general obligation bonds, 
then the advances must have not less than the average annual 
interest rate that is on the port authority's general obligation 
bonds that are outstanding at the time the advances are made.  
The port authority may advance repaid money for more objects and 
purposes of sections 59 to 69 subject to repayment in the same 
manner.  The port authority must use rentals of lands acquired 
with advanced money to collect and maintain reserves to secure 
the payment of principal and interest on revenue bonds issued to 
finance port or industrial facilities, if the rentals have been 
pledged for that purpose under section 62.  Advances made to 
acquire lands and to construct facilities for recreation 
purposes if authorized by law need not be reimbursed under this 
section.  Sections 49 to 69 do not exempt lands leased from the 
authority to a private person or entity from assessments or 
taxes against the leased property while the lessee is liable for 
the assessments or taxes under the lease. 
    Sec. 68.  [469.067] [FINDING LAND IS MARGINAL IS PRIMA 
FACIE EVIDENCE.] 
    A port authority decision that property it seeks is 
marginal is prima facie evidence in eminent domain proceedings 
that the property is marginal if the decision is made in a 
resolution, stating the characteristics that make the property 
marginal. 
    Sec. 69.  [469.068] [CONSTRUCTION, EQUIPMENT CONTRACTS; USE 
OF CITY PURCHASING.] 
    Subdivision 1.  [CONTRACTS; BIDS; BONDS.] All construction 
work and every purchase of equipment, supplies, or materials 
necessary in carrying out the purposes of sections 49 to 69, 
that involve the expenditure of $1,000 or more, shall be awarded 
by contract as provided in this subdivision.  Before receiving 
bids under sections 49 to 69, the authority shall publish, once 
a week for two consecutive weeks in the official newspaper of 
the port's city, a notice that bids will be received for the 
construction work, or purchase of equipment, supplies, or 
materials.  The notice shall state the nature of the work, and 
the terms and conditions upon which the contract is to be let 
and name a time and place where the bids will be received, 
opened, and read publicly, which time shall be not less than 
seven days after the date of the last publication.  After the 
bids have been received, opened, read publicly, and recorded, 
the commissioners shall award the contract to the lowest 
responsible bidder, reserving the right to reject any or all 
bids.  The contract shall be executed in writing and the person 
to whom the contract is awarded shall give sufficient bond to 
the board for its faithful performance.  If no satisfactory bid 
is received, the port authority may readvertise, or, by an 
affirmative vote of two of its commissioners in the case of a 
three-member commission, or five of its members in the case of a 
seven-member commission, may authorize the authority to perform 
any part or parts of any construction work by day labor under 
conditions it prescribes.  The commissioners may establish 
reasonable qualifications to determine the fitness and 
responsibility of bidders, and require bidders to meet the 
qualifications before bids are accepted.  If the commissioners 
by a two-thirds or five-sevenths vote declare that an emergency 
exists requiring the immediate purchase of any equipment or 
material or supplies at a cost in excess of $1,000, but not 
exceeding $5,000, in amount, or making of emergency repairs, it 
shall not be necessary to advertise for bids, but the material, 
equipment, or supplies may be purchased in the open market at 
the lowest price obtainable, or the emergency repairs may be 
contracted for or performed without securing formal competitive 
bids.  An emergency, for purposes of this section, is unforeseen 
circumstances or conditions which result in the jeopardizing of 
human life or property. 
    In all contracts involving the employment of labor, the 
commissioners shall stipulate conditions they deem reasonable, 
as to the hours of labor and wages and may stipulate as to the 
residence of employees to be employed by the contractors. 
    Bonds shall be required from contractors for any works of 
construction as provided in and subject to all the provisions of 
sections 574.26 to 574.31.  
    Subd. 2.  [CITY PURCHASING.] A port authority may use the 
facilities of its city's purchasing department in connection 
with construction work and to purchase equipment, supplies, or 
materials. 

                    LOCAL PORT AUTHORITY PROVISIONS 
    Sec. 70.  [469.069] [ALBERT LEA.] 
    The city of Albert Lea may establish a port authority 
commission that has the same powers as a port authority 
established under section 50 or other law.  If the city 
establishes a port authority commission, the city shall exercise 
all the powers relating to the port authority granted to a city 
by sections 49 to 69 or other law.  Notwithstanding any law to 
the contrary, the city may choose the name of the commission and 
may appoint a seven-member commission. 
    Sec. 71.  [469.070] [AUSTIN.] 
    The city of Austin may establish a port authority 
commission that has the same powers as a port authority 
established under section 50 or other law.  If the city 
establishes a port authority commission, the city shall exercise 
all the powers relating to the port authority granted to a city 
by sections 49 to 69 or other law.  Notwithstanding any law to 
the contrary, the city may choose the name of the commission and 
may appoint a seven-member commission. 
    Sec. 72.  [469.071] [BLOOMINGTON.] 
    Subdivision 1.  [ESTABLISHMENT OF PORT AUTHORITY.] The city 
of Bloomington may establish a port authority that has the same 
powers as a port authority established under section 50.  If the 
city establishes a port authority, the city shall exercise all 
the powers relating to the port authority granted to a city by 
section 50 or other law and may do all that a port authority may 
do under sections 49 to 69. 
    Subd. 2.  [ACQUISITION OF PROPERTY.] The port authority of 
the city of Bloomington may lease or purchase and accept a 
conveyance of real property from another public agency, 
commission, or unit of government if the port authority is able 
to properly use the property for the purposes of sections 49 to 
69. 
    Subd. 3.  [ISSUANCE OF BONDS.] The port authority may, with 
the approval of its city council, issue bonds under section 61 
to pay for the real property. 
    Subd. 4.  [PROPERTY TAX EXEMPTION.] Notwithstanding section 
473.556, subdivision 6, or any other law, real property conveyed 
to the port authority of the city of Bloomington by the 
metropolitan sports facilities commission is exempt from 
taxation under sections 473.556, subdivision 4; and 459.192, 
subdivision 2. 
    Sec. 73.  [469.072] [BRECKENRIDGE.] 
    Subdivision 1.  [ESTABLISHMENT.] The city of Breckenridge 
may establish a port authority commission that has the same 
powers as a port authority established under section 50 or other 
law.  If the city establishes a port authority commission, the 
city shall exercise all the powers relating to the port 
authority granted to a city by sections 49 to 69 or other law.  
Notwithstanding any law to the contrary, the city may choose the 
name of the commission and may appoint a seven-member commission.
    Subd. 2.  [MUNICIPAL HOUSING AND REDEVELOPMENT AUTHORITY.] 
If the city of Breckenridge establishes a port authority 
commission under subdivision 1, the commission may exercise the 
same powers as a municipal housing and redevelopment authority 
established under sections 1 to 47 or other law.  The city shall 
then exercise all the powers relating to the municipal housing 
and redevelopment authority granted to a city by sections 1 to 
47 or other law.  
    Sec. 74.  [469.073] [DETROIT LAKES.] 
    Subdivision 1.  [ESTABLISHMENT.] The city of Detroit Lakes 
may establish a port authority commission that has the same 
powers as a port authority established under section 50 or other 
law.  If the city establishes a port authority commission, the 
city shall exercise all the powers relating to the port 
authority granted to a city by sections 49 to 69 or other law.  
Notwithstanding any law to the contrary, the city may choose the 
name of the commission.  
    Subd. 2.  [MUNICIPAL HOUSING AND REDEVELOPMENT AUTHORITY.] 
If the city of Detroit Lakes establishes a port authority 
commission under subdivision 1, the commission may exercise the 
same powers as a municipal housing and redevelopment authority 
established under sections 1 to 47 or other law.  The city shall 
then exercise all the powers relating to the municipal housing 
and redevelopment authority granted to a city by sections 1 to 
47 or other law.  
    Sec. 75.  [469.074] [DULUTH.] 
    Subdivision 1.  [MAY OWN, OPERATE, OR CONTRACT FOR 
VESSELS.] The seaway port authority of Duluth may acquire, 
purchase, charter, lease, mortgage or otherwise own and operate 
vessels as may be necessary or convenient.  The authority may 
enter into joint vessel ownership contracts or joint ventures 
with others, contract with vessel owners and operators, and 
enter into contractual relationships necessary or convenient to 
acquire, purchase, charter, lease or operate vessels.  
    Subd. 2.  [OLD LAW DOES NOT APPLY TO MINNESOTA POINT.] The 
following quoted sentence from Minnesota Statutes 1961, section 
458.59: 
 "No state owned tax forfeited land comprising riparian 
lands or submerged lands within the harbor line as duly 
established, and all such tax forfeited lands lying within 
a distance of 1500 feet thereof, located in harbors upon 
the Great Lakes-St. Lawrence Seaway shall be offered for 
sale or sold to any private person, firm or corporation and 
all such tax forfeited lands are hereby withdrawn from sale 
to such private persons, firms or corporations." 
does not apply to land located on Minnesota Point in the city of 
Duluth that is zoned residential under the zoning ordinance of 
the city.  Before the land is offered for sale, the city 
council, the county board, and the port authority must approve 
the offering.  A sale or conveyance of the land must not include 
riparian rights.  The riparian rights are kept by the state. 
    Sec. 76.  [469.075] [FERGUS FALLS.] 
    Subdivision 1.  [ESTABLISHMENT.] The city of Fergus Falls 
may establish a port authority commission that has the same 
powers as a port authority established under section 50 or other 
law.  If the city establishes a port authority commission, the 
city shall exercise all the powers relating to the port 
authority granted to a city by sections 49 to 69 or other law.  
Notwithstanding any law to the contrary, the city may choose the 
name of the commission. 
    Subd. 2.  [MUNICIPAL HOUSING AND REDEVELOPMENT AUTHORITY.] 
If the city of Fergus Falls establishes a port authority 
commission under subdivision 1, the commission may exercise the 
same powers as a municipal housing and redevelopment authority 
established under sections 1 to 47 or other law.  The city shall 
then exercise all the powers relating to the municipal housing 
and redevelopment authority granted to a city by sections 1 to 
47 or other law. 
    Sec. 77.  [469.076] [GRANITE FALLS.] 
     The Granite Falls city council may use the powers of a 
governmental agency or subdivision under sections 49 to 69 
except that the council may not use the powers in section 61.  
The powers must be used according to and for the purposes of 
Laws 1981, chapter 225. 
    Sec. 78.  [469.077] [HASTINGS.] 
    Subdivision 1.  [ESTABLISHMENT; POWERS.] The city of 
Hastings may, by adoption of an enabling resolution in 
compliance with the procedural requirements of subdivision 3, 
establish a port authority commission that, subject to the 
provisions of subdivision 2, has the same powers as a port 
authority established under section 50 or other law, and a 
housing and redevelopment authority established under sections 1 
to 47 or other law, and shall constitute an "agency" that may 
administer one or more municipal development districts under 
section 111.  If the city establishes a port authority 
commission under this section, the city shall exercise all the 
powers relating to a port authority granted to any city by 
sections 49 to 69 or other law, and all powers relating to a 
housing and redevelopment authority granted to any city by 
sections 1 to 47 or other law.  
    Subd. 2.  [LIMITATION OF POWERS.] (a) The enabling 
resolution may impose the following limitations upon the actions 
of the port authority: 
    (1) that the port authority shall not exercise any 
specified powers contained in sections 1 to 47 and 49 to 69 or 
that the port authority shall not exercise any powers without 
the prior approval of the city council; 
    (2) that, except when previously pledged by the port 
authority, the city council may, by resolution, require the port 
authority to transfer any portion of the reserves generated by 
activities of the port authority which the city council 
determines is not necessary for the successful operation of the 
port authority, to the city general fund, to be used for any 
general purpose of the city; 
    (3) that the sale of all bonds or obligations issued by the 
port authority be approved by the city council before issuance; 
    (4) that the port authority follow the budget process for 
city departments as provided by the city and as implemented by 
the city council and mayor; 
    (5) that all official actions of the port authority must be 
consistent with the adopted comprehensive plan of the city, and 
any official controls implementing the comprehensive plan; 
    (6) that the port authority submit to the city council for 
approval by resolution any proposed project as defined in 
section 175, subdivision 8; 
    (7) that the port authority submit all planned activities 
for influencing the action of any other governmental agency, 
subdivision, or body to the city council for approval; 
    (8) that the port authority submit its administrative 
structure and management practices to the city council for 
approval; and 
    (9) any other limitation or control established by the city 
council by the enabling resolution.  
    (b) The enabling resolution may be modified at any time, 
subject to clause (e), and provided that any modification is 
made in accordance with the procedural requirements of 
subdivision 3. 
    (c) Without limiting the right of the port authority to 
petition the city council at any time, each year, within 60 days 
of the anniversary date of the initial adoption of the enabling 
resolution, the port authority shall submit to the city council 
a report stating whether and how the enabling resolution should 
be modified.  Within 30 days of receipt of the recommendation, 
the city council shall review the enabling resolution, consider 
the recommendations of the port authority, and make any 
modifications it considers appropriate; provided that any 
modification shall be made in accordance with the procedural 
requirements of subdivision 3. 
    (d) A determination by the city council that the 
limitations imposed under this section have been complied with 
by the port authority shall be conclusive.  
    (e) Limitations imposed under this section must not be 
applied in a manner that impairs the security of any bonds 
issued or contracts executed prior to the imposition of the 
limitation.  The city council shall not modify any limitations 
in effect at the time any bonds or obligations are issued or 
contracts executed to the detriment of the holder of the bonds 
or obligations or any contracting party.  
    Subd. 3.  [PROCEDURAL REQUIREMENT.] (a) The creation of a 
port authority by the city of Hastings must be by written 
resolution known as the enabling resolution.  Prior to adoption 
of the enabling resolution, the city council shall conduct a 
public hearing.  Notice of the time and place of hearing, a 
statement of the purpose of the hearing, and a summary of the 
resolution must be published in a newspaper of general 
circulation within the city once a week for two consecutive 
weeks.  The first publication must appear not more than 30 days 
from the date of the public hearing.  
    (b) All modifications to the enabling resolution must be by 
written resolution and must be adopted after notice is given and 
a public hearing conducted as required for the original adoption 
of the enabling resolution.  
    Subd. 4.  [NAME.] Notwithstanding any law to the contrary, 
the city may choose the name of the commission. 
    Subd. 5.  [REMOVAL OF COMMISSIONERS FOR CAUSE.] A 
commissioner of the port authority may be removed by the city 
council for inefficiency, neglect of duty, or misconduct in 
office.  A commissioner shall be removed only after a hearing.  
A copy of the charges must be given to the commissioner at least 
ten days before the hearing.  The commissioner must be given an 
opportunity to be heard in person or by counsel at the hearing.  
When written charges have been submitted against a commissioner, 
the city council may temporarily suspend the commissioner.  If 
the city council finds that those charges have not been 
substantiated, the commissioner shall be immediately reinstated. 
If a commissioner is removed, a record of the proceedings, 
together with the charges and findings, shall be filed in the 
office of the city clerk.  
    Sec. 79.  [469.078] [MINNEAPOLIS.] 
    Subdivision 1.  [MAY USE CHAPTER 458 POWERS GRANTED BY 1980 
LAW.] The city of Minneapolis may exercise those powers of a 
governmental agency or subdivision sections 49 to 69 granted to 
it by Laws 1980, chapter 595. 
    Subd. 2.  [PORT OPERATOR EXEMPT FROM BID LAW.] If the city 
of Minneapolis contracts with a corporation to operate a port 
facility, the corporation may sell, purchase, or rent supplies, 
materials, or equipment, or construct, alter, expand, repair, or 
maintain real or personal property at the facility without 
regard to section 471.345.  This subdivision applies regardless 
of the source of funds disbursed by the corporation. 
    Sec. 80.  [469.079] [NORTH MANKATO.] 
    Subdivision 1.  [ESTABLISHMENT.] The city of North Mankato 
may establish a port authority commission that has the same 
powers as a port authority established under section 50 or other 
law.  If the city establishes a port authority commission, the 
city shall exercise all the powers relating to the port 
authority granted to a city by sections 49 to 69 or other law.  
Notwithstanding any law to the contrary, the city may choose the 
name of the commission and may appoint a seven-member commission.
    Subd. 2.  [MUNICIPAL HOUSING AND REDEVELOPMENT AUTHORITY.] 
If the city of North Mankato establishes a port authority 
commission under subdivision 1, the commission may exercise the 
same powers as a municipal housing and redevelopment authority 
established under sections 1 to 47 or other law.  
    Sec. 81.  [469.080] [PLYMOUTH.] 
    The city of Plymouth may establish a port authority that 
has the same powers as a port authority established pursuant to 
section 50.  If the city establishes a port authority, the city 
shall exercise all the powers granted to a city by sections 49 
to 69 or other law.  
    Sec. 82.  [469.081] [RED WING.] 
    Subdivision 1.  [ESTABLISHMENT.] The city of Red Wing may, 
by adoption of an enabling resolution in compliance with the 
procedural requirements of subdivision 3, establish a port 
authority commission that, subject to the provisions of 
subdivision 2, has the same powers as a port authority 
established under section 50 or other law, and a housing and 
redevelopment authority established under sections 1 to 47 or 
other law, and shall constitute an "agency" that may administer 
one or more municipal development districts under section 111.  
If the city establishes a port authority commission under this 
section, the city shall exercise all the powers relating to a 
port authority granted to any city by sections 49 to 69 or other 
law, and all powers relating to a housing and redevelopment 
authority granted to any city by sections 1 to 47 or other law.  
    Subd. 2.  [LIMITATION OF POWERS.] (a) The enabling 
resolution may impose the following limitations upon the actions 
of the port authority: 
    (1) that the port authority shall not exercise any 
specified powers contained in sections 1 to 47 and 49 to 69 or 
that the port authority shall not exercise any powers without 
the prior approval of the city council; 
    (2) that, except when previously pledged by the port 
authority, the city council may, by resolution, require the port 
authority to transfer any portion of the reserves generated by 
activities of the port authority which the city council 
determines is not necessary for the successful operation of the 
port authority, to the city general fund, to be used for any 
general purpose of the city; 
    (3) that the sale of all bonds or obligations issued by the 
port authority be approved by the city council before issuance; 
    (4) that the port authority follow the budget process for 
city departments as provided by the city and as implemented by 
the city council and mayor; 
    (5) that all official actions of the port authority must be 
consistent with the adopted comprehensive plan of the city, and 
any official controls implementing the comprehensive plan; 
    (6) that the port authority submit to the city council for 
approval by resolution any proposed project as defined in 
section 175, subdivision 8; 
    (7) that the port authority submit all planned activities 
for influencing the action of any other governmental agency, 
subdivision, or body to the city council for approval; 
    (8) that the port authority submit its administrative 
structure and management practices to the city council for 
approval; and 
    (9) any other limitation or control established by the city 
council by the enabling resolution.  
    (b) The enabling resolution may be modified at any time, 
subject to clause (e), and provided that any modification is 
made in accordance with the procedural requirements of 
subdivision 3. 
    (c) Without limiting the right of the port authority to 
petition the city council at any time, each year, within 60 days 
of the anniversary date of the initial adoption of the enabling 
resolution, the port authority shall submit to the city council 
a report stating whether and how the enabling resolution should 
be modified.  Within 30 days of receipt of the recommendation, 
the city council shall review the enabling resolution, consider 
the recommendations of the port authority, and make any 
modifications it considers appropriate; provided that any 
modification shall be made in accordance with the procedural 
requirements of subdivision 3. 
    (d) A determination by the city council that the 
limitations imposed under this section have been complied with 
by the port authority shall be conclusive.  
    (e) Limitations imposed under this section must not be 
applied in a manner that impairs the security of any bonds 
issued or contracts executed prior to the imposition of the 
limitation.  The city council shall not modify any limitations 
in effect at the time any bonds or obligations are issued or 
contracts executed to the detriment of the holder of the bonds 
or obligations or any contracting party.  
    Subd. 3.  [PROCEDURAL REQUIREMENT.] (a) The creation of a 
port authority by the city of Red Wing must be by written 
resolution known as the enabling resolution.  Prior to adoption 
of the enabling resolution, the city council shall conduct a 
public hearing.  Notice of the time and place of hearing, a 
statement of the purpose of the hearing, and a summary of the 
resolution must be published in a newspaper of general 
circulation within the city once a week for two consecutive 
weeks.  The first publication must appear not more than 30 days 
from the date of the public hearing.  
    (b) All modifications to the enabling resolution must be by 
written resolution and must be adopted after notice is given and 
a public hearing conducted as required for the original adoption 
of the enabling resolution.  
    Subd. 4.  [NAME.] Notwithstanding any law to the contrary, 
the city may choose the name of the commission. 
    Subd. 5.  [REMOVAL OF COMMISSIONERS FOR CAUSE.] A 
commissioner of the port authority may be removed by the city 
council for inefficiency, neglect of duty, or misconduct in 
office.  A commissioner shall be removed only after a hearing.  
A copy of the charges must be given to the commissioner at least 
ten days before the hearing.  The commissioner must be given an 
opportunity to be heard in person or by counsel at the hearing.  
When written charges have been submitted against a commissioner, 
the city council may temporarily suspend the commissioner.  If 
the city council finds that those charges have not been 
substantiated, the commissioner shall be immediately reinstated. 
If a commissioner is removed, a record of the proceedings, 
together with the charges and findings, shall be filed in the 
office of the city clerk.  
    Sec. 83.  [469.082] [ROSEVILLE; PORT AUTHORITY.] 
    The governing body of the city of Roseville may exercise 
all the powers of a port authority provided by sections 49 to 69.
    Sec. 84.  [469.083] [ST. CLOUD.] 
    The St. Cloud city council may exercise all the powers of a 
port authority provided by sections 49 to 69. 
    Sec. 85.  [469.084] [ST. PAUL.] 
    Subdivision 1.  [POWERS RELATED TO RECREATIONAL 
FACILITIES.] Notwithstanding any law to the contrary, the port 
authority of the city of St. Paul may plan for, acquire by 
condemnation, purchase, or otherwise, construct, improve, 
operate, directly, by lease or otherwise, and maintain parks and 
other recreation facilities along navigable rivers and lakes 
within its port district, and on lands abutting the rivers and 
lakes.  The port authority shall establish rules on the use of 
the rivers, lakes, parks and recreation facilities either alone 
or in cooperation with the federal government or its agencies, 
the city of St. Paul, the state, or an agency or political 
subdivision of the state.  
    Subd. 2.  [NO POLICE POWER.] The port authority does not 
have police power except as provided by subdivisions 1 to 8. 
    Subd. 3.  [CONSENT FOR CITY LAND.] The port authority must 
not take lands owned, controlled, or used by the city of St. 
Paul without consent of the city council. 
    Subd. 4.  [PORT JURISDICTION.] For all other recreation 
purposes the port authority has jurisdiction over the use of all 
the navigable rivers or lakes and all the parks and recreation 
facilities. 
    Subd. 5.  [EXPENDITURES; BONDS.] The port authority may 
spend port authority money to carry out subdivisions 1 to 8 and 
issue bonds for the purposes in subdivisions 1 to 8 according to 
either section 61 or 62. 
    Subd. 6.  [CITY, COUNTY PLAN APPROVAL.] The port authority, 
prior to taking action under subdivisions 1 to 8, shall submit 
for approval plans to acquire, improve, and operate parks and 
recreation facilities along navigable rivers and lakes within 
its port district to the city of St. Paul and shall submit the 
plans for all areas located within Ramsey county, whether 
located within or without the port district, to the county for 
approval. 
    Subd. 7.  [REVENUE BONDS; SALE; RATE OF INTEREST.] 
Notwithstanding any law to the contrary, the sale of revenue 
bonds issued by the port authority under section 62, shall be at 
public sale under section 475.60, or in accordance with the 
procedures set forth in sections 153 to 166.  The bonds may be 
sold in the manner and for the price that the port authority 
determines to be for the best interest of the port authority.  A 
sale must not be made at a price so low as to cause the average 
annual rate of interest on the money received from the sale to 
exceed eight percent per year computed by adding the amount of 
the discount to the total amount of interest payable on all 
obligations of the series to their stated maturity dates.  The 
bonds may be made callable.  If issued as callable, the bonds 
may be refunded. 
    Subd. 8.  [RELATION TO INDUSTRIAL DEVELOPMENT PROVISIONS.] 
Notwithstanding any law to the contrary, the port authority of 
the city of St. Paul, under sections 49 to 69 and this section, 
may do what a redevelopment agency may do or must do under 
sections 153 to 166 to further any of the purposes of sections 
49 to 69 and subdivisions 1 to 8.  The port authority may use 
its powers and duties under sections 49 to 69 and subdivisions 1 
to 8 to further the purposes of sections 153 to 166.  The powers 
and duties in subdivisions 1 to 8 are in addition to the powers 
and duties of the port authority under sections 49 to 69, and 
under sections 153 to 166.  The port authority may use its 
powers for industrial development or to establish industrial 
development districts.  If the term " industrial" is used in 
relation to industrial development purposes under sections 49 to 
69, the term includes "economic" and "economic development." 
    Subd. 9.  [MAY JOIN IN SUPPLYING SMALL BUSINESS CAPITAL.] 
Notwithstanding any contrary law, the port authority of the city 
of St. Paul may participate with public or private corporations 
or other entities, whose purpose is to provide venture capital 
to small businesses that have facilities located or to be 
located in the port district.  For that purpose the port 
authority may use not more than ten percent of available annual 
net income or $400,000 annually, whichever is less, to acquire 
or invest in securities of, and enter into financing 
arrangements and related agreements with, the corporations or 
entities.  The participation by the port authority must not 
exceed in any year 25 percent of the total amount of funds 
provided for venture capital purposes by all of the 
participants.  The corporation or entity shall report in writing 
each month to the commissioners of the port authority all 
investment and other action taken by it since the last report.  
Funds contributed to the corporation or entity must be invested 
pro rata with each contributor of capital taking proportional 
risks on each investment.  As used in this subdivision, the term 
"small business" has the meaning given it in section 645.445, 
subdivision 2. 
    Subd. 10.  [RECREATION FACILITIES ON MISSISSIPPI RIVER.] 
The port authority of the city of Saint Paul has jurisdiction 
over the use of the Mississippi River for recreation purposes 
within its port district and may acquire and may spend port 
authority money for lands abutting the river within the port 
district to construct, operate directly, by lease or otherwise, 
and maintain recreation facilities.  The authority shall 
establish rules on the use of the river and abutting lands, 
either individually, or in cooperation with the federal 
government or its agencies, the city of Saint Paul, the state, 
or a state agency, or political subdivision.  
    Subd. 11.  [REVENUE BONDS.] Notwithstanding any law or 
charter provision to the contrary, an issue of revenue bonds 
authorized by the port authority of the city of St. Paul shall 
be issued only with the consent of the St. Paul city council in 
a resolution.  Notwithstanding any law or charter provision to 
the contrary, a project to be financed by the port authority of 
the city of St. Paul by proceeds of revenue bonds shall be 
financed only with the consent of the St. Paul city council in a 
resolution.  An existing obligation, contract, collective 
bargaining or other agreement, fringe benefit plan, or covenant 
made or entered into by the St. Paul port authority is not 
impaired by this subdivision. 
    Subd. 12.  [CITY SUPERVISION OF AUTHORITY EMPLOYEES.] 
Notwithstanding any law or charter provision to the contrary, 
the council may, by resolution adopted by a majority of the 
council, place any employee of the port authority under the 
direction, supervision, or control of the mayor or a department 
of the city. 
    Subd. 13.  [INVESTMENT IN COMMERCIAL PAPER.] 
Notwithstanding section 471.56 or other law, the port authority 
of the city of St. Paul may invest its funds in commercial paper 
of prime quality in the same manner as the state board of 
investment may invest money not currently needed. 
    Subd. 14.  [BOND FOR TREASURER AND ASSISTANT TREASURER.] 
The treasurer and assistant treasurer of the port authority of 
the city of Saint Paul shall give bond to the state in sums not 
to exceed $25,000 and $10,000 respectively.  The bonds must be 
conditioned for the faithful discharge of their duties.  The 
bonds must be approved as to both form and surety by the port 
authority and must be filed with its secretary.  The amount of 
the bonds must be set at least annually by the port authority. 
    Sec. 86.  [469.085] [SOUTH SAINT PAUL.] 
    The South Saint Paul city council may exercise the powers 
of a port authority, including the port authority of the city of 
Saint Paul, under sections 49 to 69. 
    Sec. 87.  [469.086] [WADENA.] 
    The city of Wadena may establish a port authority 
commission that has the same powers as a port authority 
established under section 50 or other law.  If the city 
establishes a port authority commission, the city shall exercise 
all the powers relating to the port authority granted to a city 
by sections 49 to 69 or other law.  Notwithstanding any law to 
the contrary, the city may choose the name of the commission and 
may appoint a seven-member commission. 
    Sec. 88.  [469.087] [WARROAD.] 
    The city of Warroad may establish a port authority 
commission that has the same powers as a port authority 
established under section 50 or other law.  If the city 
establishes a port authority commission, the city shall exercise 
all the powers relating to the port authority granted to a city 
by sections 49 to 69 or other law.  Notwithstanding any law to 
the contrary, the city may choose the name of the commission and 
may appoint a seven-member commission.  
    Sec. 89.  [469.088] [WHITE BEAR LAKE.] 
    The governing body of the city of White Bear Lake may 
exercise all the powers of a port authority provided by sections 
49 to 69. 
    Sec. 90.  [469.089] [WINONA.] 
    Subdivision 1.  [ESTABLISHMENT.] The Winona city council 
may by resolution establish the port authority of Winona. 
    Subd. 2.  [PORT AUTHORITY LAW APPLIES.] Sections 49 to 69 
apply to the Winona port authority and to the city of Winona.  
The sections apply just as they apply to a port authority 
established by section 50, except a seaway port authority, and 
to the port authority's city, except as otherwise provided in 
this section.  For the Winona port authority, when "industrial" 
is used in the context of industrial development district under 
sections 49 to 69, "industrial" or "industrial development" 
includes "economic" or "economic development."  Section 57, 
subdivision 1, and 68 and 54, subdivision 6, and the per meeting 
payment provision of section 51, subdivision 5, do not apply to 
the Winona Port Authority. 
    Subd. 3.  [CITY APPROVAL.] Action taken by the Winona port 
authority under section 59, 60, subdivision 4, or 62, must be 
approved by city council resolution to take effect. 
    Subd. 4.  [STAFF; BUDGET.] The city of Winona, by 
resolution of its city council, may provide the port authority 
with personnel and staff, temporarily, provisionally, or 
permanently on terms and conditions it considers appropriate.  
In the same way, the city may appropriate and budget the funds 
to administer the port authority as the city considers necessary 
and appropriate.  The money must be budgeted, used, and 
accounted for according to the charter and ordinances of the 
city. 
    Subd. 5.  [MARGINAL PROPERTY.] A port authority's decision 
that property it seeks is marginal under section 59 is prima 
facie evidence in eminent domain proceedings that the property 
is marginal.  The decision must be made in a resolution.  The 
resolution must state the characteristics that the authority 
thinks makes the property marginal.  The port authority 
resolution must then be approved by city council resolution. 
    Subd. 6.  [INDUSTRIAL DEVELOPMENT POWERS.] The port 
authority has the powers granted to port authorities by sections 
153 to 166.  The powers may be exercised within and outside its 
corporate limits.  The exercise of the powers is subject to 
approval by resolution of the city council. 
    Subd. 7.  [BOND INTEREST.] Revenue bonds issued by the port 
authority may be negotiated and sold at a price resulting in an 
average annual net interest rate on the bonds of not more than 
seven percent per year computed to the stated maturities. 
    Subd. 8.  [NO ASSESSMENTS; IMPROVEMENT DISTRICTS.] The port 
authority must not levy special assessments or establish local 
improvement districts.  The city of Winona, or its port 
authority with the approval by resolution of the city council, 
may exercise the powers in section 471.191 to acquire and to 
improve recreational land, buildings, and facilities within or 
outside their corporate limits. 
    Subd. 9.  [SURPLUS FUNDS.] On or before October 15 in each 
year the port authority shall report to the city council the 
amount of surplus funds that are in its judgment available for 
transfer to the sinking fund for any general obligation bonds of 
the authority, to reduce tax levies to pay the bonds.  The 
council shall then decide by resolution what amount to transfer. 
    Subd. 10.  [WISCONSIN REAL PROPERTY.] The port authority 
may purchase or lease real property in Wisconsin for barge 
fleeting or for recreation activities or for both. 
    Subd. 11.  [TRANSFER OF CITY PROPERTY TO PORT.] The city of 
Winona may transfer, with or without consideration and on other 
terms the city council considers desirable, its interest in any 
real property, including fee title, to the port authority of 
Winona.  The transfer must be authorized by ordinance.  The 
ordinance must contain the following: 
    (1) the general location and the specific legal description 
of the property; 
    (2) a finding by the city council that the real property is 
marginal under section 59, supported by reference to one or more 
of the conditions listed in section 49, subdivision 5; 
    (3) a statement as to the consideration, or absence of it, 
to be received by the city at the time of transfer; and 
    (4) other information considered appropriate by the city 
council. 
    A conveyance of fee title under this subdivision must be by 
quitclaim deed. 

                    ECONOMIC DEVELOPMENT AUTHORITIES 
    Sec. 91.  [469.090] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 91 to 109, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning. 
    Subd. 2.  [AUTHORITY.] "Authority" means an economic 
development authority.  
    Subd. 3.  [CITY.] "City" means a home rule charter or 
statutory city. 
    Subd. 4.  [DEVELOPMENT.] "Development" includes 
redevelopment, and "developing" includes redeveloping. 
    Subd. 5.  [COST OF REDEVELOPMENT.] "Cost of redevelopment" 
means, with respect to an economic development district project, 
the cost of: 
    (1) acquiring property, whether by purchase, lease, 
condemnation, or otherwise; 
    (2) demolishing or removing structures or other 
improvements on acquired properties; 
    (3) correcting soil deficiencies necessary to develop or 
use the property for an appropriate use as determined by the 
authority; 
    (4) constructing or installing public improvements, 
including streets, roads, and utilities; 
    (5) providing relocation benefits to the occupants of 
acquired properties; 
    (6) planning, engineering, legal and other services 
necessary to carry out the functions listed in clauses (1) to 
(5); and 
    (7) the allocated administrative expenses of the authority 
for the project. 
    Sec. 92.  [469.091] [ECONOMIC DEVELOPMENT AUTHORITY.] 
    Subdivision 1.  [ESTABLISHMENT.] A city may, by adopting an 
enabling resolution in compliance with the procedural 
requirements of section 94, establish an economic development 
authority that, subject to section 93, has the powers contained 
in sections 91 to 109 and the powers of a housing and 
redevelopment authority under sections 1 to 47 or other law, and 
of a city under sections 125 to 135 or other law.  If the 
economic development authority exercises the powers of a housing 
and redevelopment authority contained in sections 1 to 47 or 
other law, the city shall exercise the powers relating to a 
housing and redevelopment authority granted to a city by 
sections 1 to 47 or other law. 
    Subd. 2.  [CHARACTERISTICS.] An economic development 
authority is a public body corporate and politic and a political 
subdivision of the state with the right to sue and be sued in 
its own name.  An authority carries out an essential 
governmental function when it exercises its power, but the 
authority is not immune from liability because of this. 
    Sec. 93.  [469.092] [LIMIT OF POWERS.] 
    Subdivision 1.  [RESOLUTION.] The enabling resolution may 
impose the following limits upon the actions of the authority: 
    (1) that the authority must not exercise any specified 
powers contained in sections 1 to 47, 91 to 109, and 125 to 135 
or that the authority must not exercise any powers without the 
prior approval of the city council; 
    (2) that, except when previously pledged by the authority, 
the city council may by resolution require the authority to 
transfer any portion of the reserves generated by activities of 
the authority that the city council determines is not necessary 
for the successful operation of the authority to the debt 
service fund of the city, to be used solely to reduce tax levies 
for bonded indebtedness of the city; 
    (3) that the sale of all bonds or obligations issued by the 
authority be approved by the city council before issuance; 
    (4) that the authority follow the budget process for city 
departments as provided by the city and as implemented by the 
city council and mayor; 
    (5) that all official actions of the authority must be 
consistent with the adopted comprehensive plan of the city, and 
any official controls implementing the comprehensive plan; 
    (6) that the authority submit all planned activities for 
influencing the action of any other governmental agency, 
subdivision, or body to the city council for approval; 
    (7) that the authority submit its administrative structure 
and management practices to the city council for approval; and 
    (8) any other limitation or control established by the city 
council by the enabling resolution. 
    Subd. 2.  [MODIFICATION OF RESOLUTION.] The enabling 
resolution may be modified at any time, subject to subdivision 
5, and provided that any modification is made in accordance with 
this section. 
    Subd. 3.  [REPORT ON RESOLUTION.] Without limiting the 
right of the authority to petition the city council at any time, 
each year, within 60 days of the anniversary date of the first 
adoption of the enabling resolution, the authority shall submit 
to the city council a report stating whether and how the 
enabling resolution should be modified.  Within 30 days of 
receipt of the recommendation, the city council shall review the 
enabling resolution, consider the recommendations of the 
authority, and make any modification it considers appropriate. 
Modifications must be made in accordance with the procedural 
requirements of section 94. 
    Subd. 4.  [COMPLIANCE.] The city council's determination 
that the authority has complied with the limitations imposed 
under this section is conclusive. 
    Subd. 5.  [LIMITS; SECURITY.] Limits imposed under this 
section must not be applied in a manner that impairs the 
security of any bonds issued or contracts executed before the 
limit is imposed.  The city council must not modify any limit in 
effect at the time any bonds or obligations are issued or 
contracts executed to the detriment of the holder of the bonds 
or obligations or any contracting party. 
    Sec. 94.  [469.093] [PROCEDURAL REQUIREMENT.] 
    Subdivision 1.  [ENABLING RESOLUTION.] The creation of an 
authority by a city must be by written resolution referred to as 
the enabling resolution.  Before adopting the enabling 
resolution, the city council shall conduct a public hearing.  
Notice of the time and place of hearing, a statement of the 
purpose of the hearing, and a summary of the resolution must be 
published in a newspaper of general circulation within the city 
once a week for two consecutive weeks.  The first publication 
must appear not more than 30 days from the date of the public 
hearing. 
    Subd. 2.  [MODIFICATIONS.] All modifications to the 
enabling resolution must be by written resolution and must be 
adopted after notice is given and a public hearing conducted as 
required for the original adoption of the enabling resolution. 
    Sec. 95.  [469.094] [TRANSFER OF AUTHORITY.] 
    Subdivision 1.  [ECONOMIC DEVELOPMENT, HOUSING, 
REDEVELOPMENT POWERS.] The city may, by ordinance, divide any 
economic development, housing, and redevelopment powers granted 
under sections 1 to 47 and 91 to 109 between the economic 
development authority and any other authority or commission 
established under statute or city charter for economic 
development, housing, or redevelopment. 
    Subd. 2.  [PROJECT CONTROL, AUTHORITY, OPERATION.] The city 
may, by resolution, transfer the control, authority, and 
operation of any project as defined in section 175, subdivision 
8, or any other program or project authorized by sections 1 to 
47 or sections 125 to 135 located within the city, from the 
governmental agency or subdivision that established the project 
to the economic development authority.  The city council may 
also require acceptance of control, authority, and operation of 
the project by the economic development authority.  The economic 
development authority may exercise all of the powers that the 
governmental unit establishing the project could exercise with 
respect to the project. 
    When a project or program is transferred to the economic 
development authority, the authority shall covenant and pledge 
to perform the terms, conditions, and covenants of the bond 
indenture or other agreements executed for the security of any 
bonds issued by the governmental subdivision that initiated the 
project or program.  The economic development authority may 
exercise all of the powers necessary to perform the terms, 
conditions, and covenants of any indenture or other agreements 
executed for the security of the bonds and shall become 
obligated on the bonds when the project or program is 
transferred as provided in this subdivision. 
    Subd. 3.  [TRANSFER OF PERSONNEL.] Notwithstanding any 
other law or charter provision to the contrary, the city council 
may, by resolution, place any employees of the housing and 
redevelopment authority under the direction, supervision, or 
control of the economic development authority.  The placement of 
any employees under the direction, supervision, or control of 
the economic development authority does not affect the rights of 
any employees of the housing and redevelopment authority, 
including any rights existing under a collective bargaining 
agreement or fringe benefit plan.  The employees shall become 
employees of the economic development authority. 
    Sec. 96.  [469.095] [COMMISSIONERS; APPOINTMENT, TERMS, 
VACANCIES, PAY, REMOVAL.] 
    Subdivision 1.  [COMMISSIONERS.] Except as provided in 
subdivision 2, paragraph (d), an economic development authority 
shall consist of either three, five, or seven commissioners who 
shall be appointed after the enabling resolution provided for in 
section 94 becomes effective.  The resolution must indicate the 
number of commissioners constituting the authority. 
    Subd. 2.  [APPOINTMENT, TERMS; VACANCIES.] (a) Three-member 
authority:  the commissioners constituting a three-member 
authority, one of whom must be a member of the city council, 
shall be appointed by the mayor with the approval of the city 
council.  Those initially appointed shall be appointed for terms 
of two, four, and six years, respectively.  Thereafter all 
commissioners shall be appointed for six-year terms. 
    (b) Five-member authority:  the commissioners constituting 
a five-member authority, two of whom must be members of the city 
council, shall be appointed by the mayor with the approval of 
the city council.  Those initially appointed shall be appointed 
for terms of two, three, four, five, and six years 
respectively.  Thereafter all commissioners shall be appointed 
for six-year terms. 
    (c) Seven-member authority:  the commissioners constituting 
a seven-member authority, two of whom must be members of the 
city council, shall be appointed by the mayor with the approval 
of the city council.  Those initially appointed shall be 
appointed for terms of one, two, three, four, and five years 
respectively and two members for six years.  Thereafter all 
commissioners shall be appointed for six-year terms. 
    (d) The enabling resolution may provide that the members of 
the city council shall serve as the commissioners. 
    (e) The enabling resolution may provide for the appointment 
of members of the city council in excess of the number required 
in paragraphs (a), (b), and (c). 
    (f) A vacancy is created in the membership of an authority 
when a city council member of the authority ends council 
membership.  A vacancy for this or another reason must be filled 
for the balance of the unexpired term, in the manner in which 
the original appointment was made.  The city council may set the 
term of the commissioners who are members of the city council to 
coincide with their term of office as members of the city 
council. 
    Subd. 3.  [INCREASE IN COMMISSION MEMBERS.] An authority 
may be increased from three to five or seven members, or from 
five to seven members by a resolution adopted by the city 
council following the procedure provided for modifying the 
enabling resolution in section 94. 
    Subd. 4.  [COMPENSATION AND REIMBURSEMENT.] A commissioner, 
including the president, shall be paid for attending each 
regular or special meeting of the authority in an amount to be 
determined by the city council.  In addition to receiving pay 
for meetings, the commissioners may be reimbursed for actual 
expenses incurred in doing official business of the authority.  
All money paid for compensation or reimbursement must be paid 
out of the authority's budget. 
    Subd. 5.  [REMOVAL FOR CAUSE.] A commissioner may be 
removed by the city council for inefficiency, neglect of duty, 
or misconduct in office.  A commissioner shall be removed only 
after a hearing.  A copy of the charges must be given to the 
commissioner at least ten days before the hearing.  The 
commissioner must be given an opportunity to be heard in person 
or by counsel at the hearing.  When written charges have been 
submitted against a commissioner, the city council may 
temporarily suspend the commissioner.  If the city council finds 
that those charges have not been substantiated, the commissioner 
shall be immediately reinstated.  If a commissioner is removed, 
a record of the proceedings, together with the charges and 
findings, shall be filed in the office of the city clerk. 
    Sec. 97.  [469.096] [OFFICERS; DUTIES; ORGANIZATIONAL 
MATTERS.] 
    Subdivision 1.  [BYLAWS, RULES, SEAL.] An authority may 
adopt bylaws and rules of procedure and shall adopt an official 
seal. 
    Subd. 2.  [OFFICERS.] An authority shall elect a president, 
a vice president, a treasurer, a secretary, and an assistant 
treasurer.  The authority shall elect the president, treasurer, 
and secretary annually.  A commissioner must not serve as 
president and vice president at the same time.  The other 
offices may be held by the same commissioner.  The offices of 
secretary and assistant treasurer need not be held by a 
commissioner. 
    Subd. 3.  [DUTIES AND POWERS.] The officers have the usual 
duties and powers of their offices.  They may be given other 
duties and powers by the authority. 
    Subd. 4.  [TREASURER'S DUTIES.] The treasurer: 
    (1) shall receive and is responsible for authority money; 
    (2) is responsible for the acts of the assistant treasurer; 
    (3) shall disburse authority money by check only; 
    (4) shall keep an account of the source of all receipts, 
and the nature, purpose, and authority of all disbursements; and 
    (5) shall file the authority's detailed financial statement 
with its secretary at least once a year at times set by the 
authority. 
    Subd. 5.  [ASSISTANT TREASURER.] The assistant treasurer 
has the powers and duties of the treasurer if the treasurer is 
absent or disabled. 
    Subd. 6.  [TREASURER'S BOND.] The treasurer shall give bond 
to the state conditioned for the faithful discharge of official 
duties.  The bond must be approved as to form and surety by the 
authority and filed with the secretary.  The bond must be for 
twice the amount of money likely to be on hand at any one time, 
as determined at least annually by the authority provided that 
the bond must not exceed $300,000. 
    Subd. 7.  [PUBLIC MONEY.] Authority money is public money. 
    Subd. 8.  [CHECKS.] An authority check must be signed by 
the treasurer and one other officer named by the authority in a 
resolution.  The check must state the name of the payee and the 
nature of the claim that the check is issued for. 
    Subd. 9.  [FINANCIAL STATEMENT.] The authority's detailed 
financial statement must show all receipts and disbursements, 
their nature, the money on hand, the purposes to which the money 
on hand is to be applied, the authority's credits and assets, 
and its outstanding liabilities in a form required for the 
city's financial statements.  The authority shall examine the 
statement together with the treasurer's vouchers.  If the 
authority finds that the statement and vouchers are correct, it 
shall approve them by resolution and enter the resolution in its 
records. 
    Sec. 98.  [469.097] [EMPLOYEES; SERVICES; SUPPLIES.] 
    Subdivision 1.  [EMPLOYEES.] An economic development 
authority may employ an executive director, a chief engineer, 
other technical experts and agents, and other employees as it 
may require, and determine their duties, qualifications, and 
compensation. 
    Subd. 2.  [CONTRACT FOR SERVICES.] The authority may 
contract for the services of consultants, agents, public 
accountants, and other persons needed to perform its duties and 
exercise its powers. 
    Subd. 3.  [LEGAL SERVICES.] The authority may use the 
services of the city attorney or hire a general counsel for its 
legal needs.  The city attorney or general counsel, as 
determined by the authority, is its chief legal advisor. 
    Subd. 4.  [SUPPLIES.] The authority may purchase the 
supplies and materials it needs to carry out sections 91 to 109. 
    Subd. 5.  [CITY PURCHASING.] An authority may use the 
facilities of its city's purchasing department in connection 
with construction work and to purchase equipment, supplies, or 
materials. 
    Subd. 6.  [CITY FACILITIES, SERVICES.] A city may furnish 
offices, structures and space, and stenographic, clerical, 
engineering, or other assistance to its authority. 
    Subd. 7.  [DELEGATION POWER.] The authority may delegate to 
one or more of its agents or employees powers or duties as it 
may deem proper. 
    Sec. 99.  [469.098] [CONFLICT OF INTEREST.] 
    Except as authorized in section 471.88 a commissioner, 
officer, or employee of an authority must not acquire any 
financial interest, direct or indirect, in any project or in any 
property included or planned to be included in any project, nor 
shall the person have any financial interest, direct or 
indirect, in any contract or proposed contract for materials or 
service to be furnished or used in connection with any project. 
    Sec. 100.  [469.099] [DEPOSITORIES; DEFAULT; COLLATERAL.] 
    Subdivision 1.  [NAMED; BOND.] Every two years an authority 
shall name national or state banks within the state as 
depositories.  Before acting as a depository, a named bank shall 
give the authority a bond approved as to form and surety by the 
authority.  The bond must be conditioned for the safekeeping and 
prompt repayment of deposits.  The amount of bond must be at 
least equal to the maximum sums expected to be deposited at any 
one time. 
    Subd. 2.  [ONE BANK ACCOUNT.] An authority may deposit all 
its money from any source in one bank account. 
    Subd. 3.  [DEFAULT; COLLATERAL.] When authority funds are 
deposited by the treasurer in a bonded depository, the treasurer 
and the surety on the treasurer's official bond are exempt from 
liability for the loss of the deposits because of the failure, 
bankruptcy, or other act or default of the depository.  However, 
an authority may accept assignments of collateral from its 
depository to secure deposits just as assignments of collateral 
are permitted by law to secure deposits of the authority's city. 
    Sec. 101.  [469.100] [OBLIGATIONS.] 
    Subdivision 1.  [TAXES AND ASSESSMENTS PROHIBITED.] An 
authority must not levy a tax or special assessment, except as 
otherwise provided in sections 91 to 109, pledge the credit of 
the state or the state's municipal corporations or other 
subdivisions, or incur an obligation enforceable on property not 
owned by the authority. 
    Subd. 2.  [BUDGET TO CITY.] Annually, at a time fixed by 
charter, resolution, or ordinance of the city, an authority 
shall send its budget to its city's council.  The budget must 
include a detailed written estimate of the amount of money that 
the authority expects to need from the city to do authority 
business during the next fiscal year.  The needed amount is what 
is needed in excess of any expected receipts from other sources. 
    Subd. 3.  [FISCAL YEAR.] The fiscal year of the authority 
must be the same as the fiscal year of its city. 
    Subd. 4.  [REPORT TO CITY.] Annually, at a time and in a 
form fixed by the city council, the authority shall make a 
written report to the council giving a detailed account of its 
activities and of its receipts and expenditures during the 
preceding calendar year, together with additional matters and 
recommendations it deems advisable for the economic development 
of the city. 
    Subd. 5.  [AUDITS.] The financial statements of the 
authority must be prepared, audited, filed, and published or 
posted in the manner required for the financial statements of 
the city that established the authority.  The financial 
statements must permit comparison and reconciliation with the 
city's accounts and financial reports.  The report must be filed 
with the state auditor by June 30 of each year.  The auditor 
shall review the report and may accept it or, in the public 
interest, audit the books of the authority. 
    Subd. 6.  [COMPLIANCE EXAMINATIONS.] At the request of the 
city or upon the auditor's initiative, the state auditor may 
make a legal compliance examination of the authority for that 
city.  Each authority examined must pay the total cost of the 
examination, including the salaries paid to the examiners while 
actually engaged in making the examination.  The state auditor 
may bill monthly or at the completion of the audit.  All 
collections received must be deposited in the revolving fund of 
the state auditor. 
    Sec. 102.  [469.101] [POWERS.] 
    Subdivision 1.  [ESTABLISHMENT.] An economic development 
authority may create and define the boundaries of economic 
development districts at any place or places within the city if 
the district satisfies the requirements of section 175, 
subdivision 10, except that the district boundaries must be 
contiguous, and may use the powers granted in sections 91 to 109 
to carry out its purposes.  First the authority must hold a 
public hearing on the matter.  At least ten days before the 
hearing, the authority shall publish notice of the hearing in a 
daily newspaper of general circulation in the city.  Also, the 
authority shall find that an economic development district is 
proper and desirable to establish and develop within the city. 
    Subd. 2.  [ACQUIRE PROPERTY.] The economic development 
authority may acquire by lease, purchase, gift, devise, or 
condemnation proceedings the needed right, title, and interest 
in property to create economic development districts.  It shall 
pay for the property out of money it receives under sections 91 
to 109.  It may hold and dispose of the property subject to the 
limits and conditions in sections 91 to 109.  The title to 
property acquired by condemnation or purchase must be in fee 
simple, absolute.  The authority may accept an interest in 
property acquired in another way subject to any condition of the 
grantor or donor.  The condition must be consistent with the 
proper use of the property under sections 91 to 109.  Property 
acquired, owned, leased, controlled, used, or occupied by the 
authority for any of the purposes of this section is for public 
governmental and municipal purposes and is exempt from taxation 
by the state or by its political subdivisions.  The exemption 
applies only while the authority holds property for its own 
purpose.  The exemption is subject to the provisions of section 
272.02, subdivision 5.  When the property is sold it becomes 
subject to taxation. 
    Subd. 3.  [OPTIONS.] The economic development authority may 
sign options to purchase, sell, or lease property.  
    Subd. 4.  [EMINENT DOMAIN.] The economic development 
authority may exercise the right of eminent domain under chapter 
117, or under its city's charter to acquire property it is 
authorized to acquire by condemnation.  The authority may 
acquire in this way property acquired by its owner by eminent 
domain or property already devoted to a public use only if its 
city's council approves.  The authority may take possession of 
property to be condemned after it files a petition in 
condemnation proceedings describing the property.  The authority 
may abandon the condemnation before taking possession. 
    Subd. 5.  [CONTRACTS.] The economic development authority 
may make contracts for the purpose of economic development 
within the powers given it in sections 91 to 109.  The authority 
may contract or arrange with the federal government, or any of 
its departments, with persons, public corporations, the state, 
or any of its political subdivisions, commissions, or agencies, 
for separate or joint action, on any matter related to using the 
authority's powers or performing its duties.  The authority may 
contract to purchase and sell real and personal property.  An 
obligation or expense must not be incurred unless existing 
appropriations together with the reasonably expected revenue of 
the authority from other sources are sufficient to discharge the 
obligation or pay the expense when due.  The state and its 
municipal subdivisions are not liable on the obligations. 
    Subd. 6.  [LIMITED PARTNER.] The economic development 
authority may be a limited partner in a partnership whose 
purpose is consistent with the authority's purpose.  
    Subd. 7.  [RIGHTS; EASEMENTS.] The economic development 
authority may acquire rights or an easement for a term of years 
or perpetually for development of an economic development 
district. 
    Subd. 8.  [SUPPLIES; MATERIALS.] The economic development 
authority may buy the supplies and materials it needs to carry 
out this section.  
    Subd. 9.  [RECEIVE PUBLIC PROPERTY.] The economic 
development authority may accept land, money, or other 
assistance, whether by gift, loan or otherwise, in any form from 
the federal or state government, or an agency of either, or a 
local subdivision of state government to carry out sections 91 
to 109 and to acquire and develop an economic development 
district and its facilities under this section.  
    Subd. 10.  [DEVELOPMENT DISTRICT AUTHORITY.] The economic 
development authority may sell or lease land held by it for 
economic development in economic development districts.  The 
authority may acquire, sell, or lease single or multiple tracts 
of land regardless of size, to be developed as a part of the 
economic development of the district under sections 91 to 109.  
    Subd. 11.  [FOREIGN TRADE ZONE.] The economic development 
authority may apply to the board defined in United States Code, 
title 19, section 81a, for the right to use the powers provided 
in United States Code, title 19, sections 81a to 81u.  If the 
right is granted, the authority may use the powers.  One 
authority may apply with another authority. 
    Subd. 12.  [RELATION TO OTHER REDEVELOPMENT POWERS.] The 
economic development authority may exercise powers and duties of 
a redevelopment agency under sections 153 to 166, for a purpose 
in sections 1 to 47 or 91 to 109.  The authority may also use 
the powers and duties in sections 1 to 47 and 91 to 109 for a 
purpose in sections 153 to 166. 
    Subd. 13.  [PUBLIC FACILITIES.] The authority may operate 
and maintain a public parking facility or other public facility 
to promote development in an economic development district. 
    Subd. 14.  [GOVERNMENT AGENT.] An economic development 
authority may cooperate with or act as agent for the federal or 
the state government, or a state public body, or an agency or 
instrumentality of a government or a public body to carry out 
sections 91 to 109 or any other related federal, state or local 
law in the area of economic development district improvement. 
    Subd. 15.  [STUDIES, ANALYSIS, RESEARCH.] An authority may 
study and analyze economic development needs in the city, and 
ways to meet the needs.  An authority may study the desirable 
patterns for land use for economic development and community 
growth and other factors affecting local economic development in 
the city and make the result of the studies available to the 
public and to industry in general.  An authority may engage in 
research and disseminate information on economic development 
within the city. 
    Subd. 16.  [PUBLIC RELATIONS.] To further an authorized 
purpose an authority may (1) join an official, industrial, 
commercial, or trade association, or another organization 
concerned with the purpose, (2) have a reception of officials 
who may contribute to advancing the city and its economic 
development, and (3) carry out other public relations activities 
to promote the city and its economic development.  Activities 
under this subdivision have a public purpose. 
    Subd. 17.  [ACCEPT PUBLIC LAND.] An authority may accept 
conveyances of land from all other public agencies, commissions 
or other units of government, if the land can be properly used 
by the authority in an economic development district, to carry 
out the purposes of sections 91 to 109. 
    Subd. 18.  [ECONOMIC DEVELOPMENT.] An authority may carry 
out the law on economic development districts to develop and 
improve the lands in an economic development district to make it 
suitable and available for economic development uses and 
purposes.  An authority may fill, grade, and protect the 
property and do anything necessary and expedient, after 
acquiring the property, to make it suitable and attractive as a 
tract for economic development.  An authority may lease some or 
all of its lands or property and may set up local improvement 
districts in all or part of an economic development district. 
    Subd. 19.  [LOANS IN ANTICIPATION OF BONDS.] After 
authorizing bonds under sections 103 and 104, an authority may 
borrow to provide money immediately required for the bond 
purpose.  The loans must not exceed the amount of the bonds.  
The authority shall by resolution decide the terms of the 
loans.  The loans must be evidenced by negotiable notes due in 
not more than 12 months from the date of the loan payable to the 
order of the lender or to bearer, to be repaid with interest 
from the proceeds of the bonds when the bonds are issued and 
delivered to the bond purchasers.  The loan must not be obtained 
from any commissioner of the authority or from any corporation, 
association, or other institution of which an authority 
commissioner is a stockholder or officer. 
    Subd. 20.  [USE OF PROCEEDS.] The proceeds of obligations 
issued by an authority under section 104 and temporary loans 
obtained under subdivision 19 may be used to make or purchase 
loans for economic development facilities that the authority 
believes will require financing.  To make or purchase the loans, 
the authority may enter into loan and related agreements, both 
before and after issuing the obligations, with persons, firms, 
public or private corporations, federal or state agencies, and 
governmental units under terms and conditions the authority 
considers appropriate.  A governmental unit in the state may 
apply, contract for, and receive the loans.  Chapter 475 does 
not apply to the loans. 
    Subd. 21.  [MINED UNDERGROUND SPACE DEVELOPMENT.] Upon 
delegation by a municipality as provided in section 140, an 
authority may exercise any of the delegated powers in connection 
with mined underground space development under sections 136 to 
142. 
    Sec. 103.  [469.102] [GENERAL OBLIGATION BONDS.] 
    Subdivision 1.  [AUTHORITY; PROCEDURE.] An economic 
development authority may issue general obligation bonds in the 
principal amount authorized by two-thirds majority vote of its 
city's council.  The bonds may be issued in anticipation of 
income from any source.  The bonds may be issued:  (1) to secure 
funds needed by the authority to pay for acquired property or 
(2) for other purposes in sections 91 to 109.  The bonds must be 
in the amount and form and bear interest at the rate set by the 
city council.  The authority shall sell the bonds to the highest 
bidder.  The authority shall publish notice of the time and the 
place for receiving bids, once at least two weeks before the bid 
deadline.  Except as otherwise provided in sections 91 to 109, 
the issuance of the bonds is governed by chapter 475.  The 
authority when issuing the bonds is a municipal corporation 
under chapter 475.  
    Subd. 2.  [DETAIL; MATURITY.] The authority with the 
consent of its city's council shall set the date, denominations, 
place of payment, form, and details of the bonds.  The bonds 
must mature serially.  The first installment is due in not more 
than three years and the last in not more than 20 years from the 
date of issuance.  
    Subd. 3.  [SIGNATURES; COUPONS; LIABILITY.] The bonds must 
be signed by the president of the authority, be attested by its 
secretary, and be countersigned by its treasurer; the signatures 
may be facsimile signatures.  The interest coupons if any, must 
be attached to the bonds.  The coupons must be executed and 
authenticated by the printed, engrossed, or lithographed 
facsimile signature of the authority's president and secretary.  
The bonds do not impose any personal liability on a member of 
the authority. 
    Subd. 4.  [PLEDGE.] The bonds must be secured by the pledge 
of the full faith, credit, and resources of the issuing 
authority's city.  The authority may pledge the full faith, 
credit, and resources of the city only if the city specifically 
authorizes the authority to do so.  The city council must first 
decide whether the issuance of the bonds by the authority is 
proper in each case and if so, the amount of bonds to issue.  
The city council shall give specific consent in an ordinance to 
the pledge of the city's full faith, credit, and resources.  The 
authority shall pay the principal amount of the bonds and the 
interest on it from taxes levied under this section to make the 
payment or from authority income from any source.  
    Subd. 5.  [TAX LEVY.] An authority that issues bonds under 
this section, shall, before issuing them, levy a tax for each 
year on the taxable property in the authority's city.  The tax 
must be for at least five percent more than the amount required 
to pay the principal and interest on the bonds as the principal 
and interest mature.  The tax must be levied annually until the 
principal and interest are paid in full.  After the bonds have 
been delivered to the purchasers, the tax must not be repealed 
until the debt is paid.  After the bonds are issued, the 
authority need not take any more action to authorize extending, 
assessing, and collecting the tax.  The authority's secretary 
shall immediately send a certified copy of the levy to the 
county auditor, together with full information on the bonds for 
which the tax is levied.  The county auditor shall extend and 
assess the levied tax annually until the principal and interest 
are paid in full.  The authority shall transfer the surplus from 
the excess levy in this section to a sinking fund after the 
principal and interest for which the tax was levied and 
collected is paid.  The authority may direct its secretary to 
send a certificate to the county auditor before October 15 in a 
year.  The certificate must state how much available income, 
including the amount in the sinking fund, the authority will use 
to pay principal or interest or both on each specified issue of 
the authority's bonds.  The auditor shall then reduce the bond 
levy for that year by that amount.  The authority shall then set 
aside the certified amount and may not use it for any purpose 
except to pay the principal and interest on the bonds.  The 
taxes in this section shall be collected and sent to the 
authority by the county treasurer as provided in chapter 276.  
The taxes must be used only to pay the bonds when due.  
    Subd. 6.  [AUTHORIZED SECURITIES.] Bonds legally issued 
under this chapter are authorized securities under section 
50.14.  A savings bank, trust company, or insurance company may 
invest in them.  A public or municipal corporation may invest 
its sinking funds in them.  The bonds may be pledged by a bank 
or trust company as security for the deposit of public money in 
place of a surety bond. 
    The authority's bonds are instrumentalities of a public 
governmental agency. 
    Sec. 104.  [469.103] [REVENUE BONDS; PLEDGE; COVENANTS.] 
    Subdivision 1.  [AUTHORITY.] An economic development 
authority may decide by resolution to issue its revenue bonds 
either at one time or in series from time to time.  The revenue 
bonds may be issued to provide money to pay to acquire land 
needed to operate the authority, to purchase or construct 
facilities, to purchase, construct, install, or furnish capital 
equipment to operate a facility for economic development of any 
kind within the city, or to pay to extend, enlarge, or improve a 
project under its control.  The issued bonds may include the 
amount the authority considers necessary to establish an initial 
reserve to pay principal and interest on the bonds.  The 
authority shall state in a resolution how the bonds and their 
attached interest coupons are to be executed.  
    Subd. 2.  [FORM.] The bonds of each series issued by the 
authority under this section shall bear interest at a rate or 
rates, shall mature at the time or times within 20 years from 
the date of issuance, and shall be in the form, whether payable 
to bearer, registrable as to principal, or fully registrable, as 
determined by the authority.  Section 103, subdivision 6, 
applies to all bonds issued under this section, and the bonds 
and their coupons, if any, when payable to bearer, shall be 
negotiable instruments. 
    Subd. 3.  [SALE.] The sale of revenue bonds issued by the 
authority shall be at public or private sale.  The bonds may be 
sold in the manner and for the price that the authority 
determines to be for the best interest of the authority.  The 
bonds may be made callable, and if so issued, may be refunded. 
    Subd. 4.  [AGREEMENTS.] The authority may by resolution 
make an agreement or covenant with the bondholders or their 
trustee.  The authority must first decide that the agreement or 
covenant is needed or desirable to do what the authority may do 
under this section and to assure that the revenue bonds are 
marketable and promptly paid. 
    Subd. 5.  [REVENUE PLEDGE.] In issuing general obligation 
or revenue bonds, the authority may secure the payment of the 
principal and the interest on the bonds by a pledge of and lien 
on authority revenue.  The revenue must come from the facility 
to be acquired, constructed, or improved with the bond proceeds 
or from other facilities named in the bond-authorizing 
resolutions.  The authority also may secure the payment with its 
promise to impose, maintain, and collect enough rentals, rates 
and charges, for the use and occupancy of the facilities and for 
services furnished in connection with the use and occupancy, to 
pay its current expenses to operate and maintain the named 
facilities, and to produce and deposit sufficient net revenue in 
a special fund to meet the interest and principal requirements 
of the bonds, and to collect and keep any more money required by 
the resolutions.  The authority shall decide what constitutes 
"current expense" under this subdivision based on what is normal 
and reasonable under generally accepted accounting principles.  
Revenues pledged by the authority must not be used or pledged 
for any other authority purpose or to pay any other bonds issued 
under this section or under section 103, unless the other use or 
pledge is specifically authorized in the bond-authorizing 
resolutions. 
    Subd. 6.  [NOT CITY DEBT.] Revenue bonds issued under this 
section are not a debt of the authority's city nor a pledge of 
that city's full faith and credit.  The bonds are payable only 
from project revenue as described in this section.  A revenue 
bond must contain on its face a statement to the effect that the 
economic development authority and its city do not have to pay 
the bond or the interest on it except from revenue and that the 
faith, credit, and taxing power of the city are not pledged to 
pay the principal of or the interest on the bond. 
    Subd. 7.  [NOT APPLICABLE.] Sections 154, subdivision 2, 
paragraph (e), and 155, subdivisions 3, 4, and 5 do not apply to 
revenue bonds issued under this section and sections 153 to 166 
if the interest on the revenue bonds is subject to both state 
and federal income tax or if the revenue bond proceeds are not 
loaned by the authority to a private person.  
    Subd. 8.  [TAX INCREMENT BONDS.] Obligations secured or 
payable from tax increment revenues and issued pursuant to this 
section or section 103 are subject to the provisions of section 
179. 
    Sec. 105.  [469.104] [SECTIONS THAT APPLY IF FEDERAL LIMIT 
APPLIES.] 
    Sections 474A.01 to 474A.21 apply to obligations issued 
under sections 91 to 109 that are limited by a federal 
limitation act as defined in section 474A.02, subdivision 9, or 
existing federal law as defined in section 474A.02, subdivision 
8. 
    Sec. 106.  [469.105] [SALE OF PROPERTY.] 
    Subdivision 1.  [POWER.] An economic development authority 
may sell and convey property owned by it within the city or an 
economic development district if it determines that the sale and 
conveyance are in the best interests of the city or district and 
its people, and that the transaction furthers its general plan 
of economic development.  This section is not limited by other 
law on powers of economic development authorities.  
    Subd. 2.  [NOTICE; HEARING.] An authority shall hold a 
hearing on the sale.  At the hearing a taxpayer may testify for 
or against the sale.  At least ten, but not more than 20, days 
before the hearing the authority shall publish notice of the 
hearing on the proposed sale in a newspaper.  The newspaper must 
be published and have general circulation in the authority's 
county and city.  The notice must describe the property to be 
sold and state the time and place of the hearing.  The notice 
must also state that the public may see the terms and conditions 
of the sale at the authority's office and that at the hearing 
the authority will meet to decide if the sale is advisable.  
    Subd. 3.  [DECISION; APPEAL.] The authority shall make its 
findings and decision on whether the sale is advisable and enter 
its decision on its records within 30 days of the hearing.  A 
taxpayer may appeal the decision by filing a notice of appeal 
with the district court in the city or economic development 
district's county and serving the notice on the secretary of the 
authority, within 20 days after the decision is entered.  The 
only ground for appeal is that the action of the authority was 
arbitrary, capricious, or contrary to law.  
    Subd. 4.  [TERMS.] The terms and conditions of sale of the 
property must include the use that the bidder will be allowed to 
make of it.  The authority may require the purchaser to file 
security to assure that the property will be given that use.  In 
deciding the sale terms and conditions the authority may 
consider the nature of the proposed use and the relation of the 
use to the improvement of the authority's city and the business 
and the facilities of the authority in general.  The sale must 
be made on the authority's terms and conditions.  The authority 
may publish an advertisement for bids on the property at the 
same time and in the same manner as the notice of hearing 
required in this section.  The authority may award the sale to 
the bid considered by it to be most favorable considering the 
price and the specified intended use.  The authority may also 
sell the property at private sale at a negotiated price if after 
its hearing the authority considers that sale to be in the 
public interest and to further the aims and purposes of sections 
91 to 109. 
    Subd. 5.  [ONE-YEAR DEADLINE.] Within one year from the 
date of purchase, the purchaser shall devote the property to its 
intended use or begin work on the improvements to the property 
to devote it to that use.  If the purchaser fails to do so, the 
authority may cancel the sale and title to the property shall 
return to it.  The authority may extend the time to comply with 
a condition if the purchaser has good cause.  The terms of sale 
may contain other provisions that the authority considers 
necessary and proper to protect the public interest.  A 
purchaser must not transfer title to the property within one 
year of purchase without the consent of the authority.  
    Subd. 6.  [COVENANT RUNNING WITH THE LAND.] A sale made 
under this section must incorporate in the deed as a covenant 
running with the land the conditions of sections 91 to 109 
relating to the use of the land.  If the covenant is violated 
the authority may declare a breach of the covenant and seek a 
judicial decree from the district court declaring a forfeiture 
and a cancellation of the deed.  
    Subd. 7.  [PLANS; SPECIFICATIONS.] A conveyance must not be 
made until the purchaser gives the authority plans and 
specifications to develop the property sold.  The authority must 
approve the plans and specifications in writing.  The authority 
may require preparation of final plans and specifications before 
the hearing on the sale.  
    Sec. 107.  [469.106] [ADVANCES BY AUTHORITY.] 
    An authority may advance its general fund money or its 
credit, or both, without interest, for the objects and purposes 
of sections 91 to 109.  The advances must be repaid from the 
sale or lease, or both, of developed or redeveloped lands.  If 
the money advanced for the development or redevelopment was 
obtained from the sale of the authority's general obligation 
bonds, then the advances must have not less than the average 
annual interest rate that is on the authority's general 
obligation bonds that are outstanding at the time the advances 
are made.  The authority may advance repaid money for more 
objects and purposes of sections 91 to 109 subject to repayment 
in the same manner.  The authority must still use rentals of 
lands acquired with advanced money to collect and maintain 
reserves to secure the payment of principal and interest on 
revenue bonds issued to finance economic development facilities, 
if the rentals have been pledged for that purpose under section 
104.  Advances made to acquire lands and to construct facilities 
for recreation purposes if authorized by law need not be 
reimbursed under this section.  Sections 91 to 109 do not exempt 
lands leased from the authority to a private person, or entity 
from assessments or taxes against the leased property while the 
lessee is liable for the assessments or taxes under the lease. 
    Sec. 108.  [469.107] [CITY MAY LEVY TAXES FOR ECONOMIC 
DEVELOPMENT AUTHORITY.] 
    Subdivision 1.  [CITY TAX LEVY.] A city may, at the request 
of the authority, levy a tax in any year for the benefit of the 
authority.  The tax must be for not more than .75 mill times the 
assessed valuation of taxable property in the city.  The tax is 
not subject to levy limits.  The amount levied must be paid by 
the city treasurer to the treasurer of the authority, to be 
spent by the authority. 
    Subd. 2.  [REVERSE REFERENDUM.] A city may increase its 
levy for economic development authority purposes under 
subdivision 1 in the following way.  Its city council must first 
pass a resolution stating the proposed amount of levy increase.  
The city must then publish the resolution together with a notice 
of public hearing on the resolution for two successive weeks in 
its official newspaper or if none exists in a newspaper of 
general circulation in the city.  The hearing must be held two 
to four weeks after the first publication.  After the hearing, 
the city council may decide to take no action or may adopt a 
resolution authorizing the proposed increase or a lesser 
increase.  A resolution authorizing an increase must be 
published in the city's official newspaper or if none exists in 
a newspaper of general circulation in the city.  The resolution 
is not effective if a petition requesting a referendum on the 
resolution is filed with the city clerk within 30 days of 
publication of the resolution.  The petition must be signed by 
voters equaling five percent of the votes cast in the city in 
the last general election.  The election must be held pursuant 
to the procedure specified in section 275.58. 
    Sec. 109.  [469.108] [SPECIAL LAW; OPTIONAL USE.] 
    A city that has established a port authority by special law 
or that has been granted the power to establish a port authority 
by special law, or a city whose city council has been authorized 
to exercise the powers of a port authority by special law may 
elect to use the powers granted in sections 91 to 109.  If the 
election is made, the powers and duties set forth in sections 91 
to 109 supersede the special law and the special law must not be 
used after the election.  The use of powers under sections 91 to 
109 by a city described in this section does not impair the 
security of any obligations issued or contracts or agreements 
executed under the special law.  Control, authority, and 
operation of any project may be transferred to the authority in 
the manner provided in section 95. 

                           AREA REDEVELOPMENT 
    Sec. 110.  [469.109] [PURPOSE.] 
    The legislature finds that there exists in the state 
certain areas of substantial and persistent unemployment causing 
hardship to many individuals and their families and that there 
also exist certain rural areas where development and 
redevelopment should be encouraged.  The legislature finds that 
the powers and facilities of the state government and local 
communities, in cooperation with the federal government, should 
assist rural areas and areas of substantial and chronic 
unemployment in planning and financing economic redevelopment by 
private enterprise, enabling those areas to enhance their 
prosperity by the establishment of stable and diversified local 
economies, and to provide new employment opportunities through 
the development and expansion of new or existing facilities and 
resources.  
    The legislature finds that the establishment of local or 
regional area redevelopment agencies in Minnesota having the 
power to acquire, build, lease, sell, or otherwise provide 
plants and facilities for industrial, recreational, or 
commercial development will create new employment and promote 
economic redevelopment of rural areas and of depressed or 
underdeveloped areas in the state, and that the accomplishment 
of these objectives is a public purpose for which public money 
may be spent.  
    Sec. 111.  [469.110] [DEFINITIONS.] 
    Subdivision 1. [GENERALLY.] In sections 110 to 124, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates otherwise. 
    Subd. 2.  [AUTHORITY.] "Authority" means the energy and 
economic development authority. 
    Subd. 3.  [LOCAL AGENCY.] "Local agency" means the area or 
municipal redevelopment agencies created or authorized to be 
created by sections 110 to 124, or the governing body of any 
Indian tribe or any entity established and recognized by that 
governing body. 
    Subd. 4.  [MUNICIPALITY.] "Municipality" means any home 
rule charter or statutory city, county, town, or school district.
    Subd. 5.  [GOVERNING BODY.] "Governing body" means the 
council, board of trustees, or other body charged with governing 
any municipality. 
    Subd. 6.  [BOARD.] "Board" means the governing body of any 
local or area redevelopment agency created in accordance with 
the provisions of sections 110 to 124. 
    Subd. 7.  [REDEVELOPMENT AREA.] "Redevelopment area" means 
a depressed area within the territorial boundaries of any 
municipality or group of municipalities of the state reasonably 
defined by the local or area redevelopment agency wherein 
critical conditions of unemployment, underdevelopment, economic 
depression, depletion of natural resources, or widespread 
reliance on public assistance are found to exist by the 
municipality or municipalities.  
    Subd. 8.  [FEDERAL AGENCY.] "Federal agency" means the 
government of the United States or any department, corporation, 
agency or instrumentality thereof.  
    Subd. 9.  [MINNESOTA ACCOUNT.] "Minnesota account" means 
the account appropriated to the energy and economic development 
authority by section 122, to assist a local agency in financing 
or planning a redevelopment project.  
    Subd. 10.  [REDEVELOPMENT PROJECT.] "Redevelopment project" 
means any approved site, structure, facility, or undertaking 
comprising or connected with any industrial, recreational, 
commercial, or manufacturing enterprise established or assisted 
by a local, regional, or area redevelopment agency.  
    Subd. 11.  [RURAL AREA.] "Rural area" means any area so 
defined in section 109 of the rural development act of 1972, 
Public Law 92-419, and unless in conflict with that act, shall 
include all areas not within the outer boundary of any city 
having a population of 50,000 or more and its immediately 
adjacent urbanized and urbanizing areas with a population 
density of more than 100 persons per square mile.  
    Subd. 12.  [INDIAN ECONOMIC ENTERPRISE.] "Indian economic 
enterprise" means any commercial, industrial, or business 
activity established or organized for the purpose of profit, at 
least 51 percent of which is owned by persons of 25 percent or 
more Indian blood. 
    Subd. 13.  [INDIAN TRIBE.] "Indian tribe" means any group 
qualifying under Public Law 93-262, section 3. 
    Sec. 112.  [469.111] [LOCAL OR AREA AGENCIES; 
ESTABLISHMENT.] 
    Subdivision 1.  [FINDINGS REQUIRED.] In order to carry out 
the purposes of sections 110 to 124, any municipality or group 
of municipalities may establish a public body, corporate and 
politic, to be known as the municipal or area redevelopment 
agency in and for that municipality or group of municipalities. 
No such agency shall be established until the governing body of 
the municipality shall by resolution find that the area is a 
rural area as defined herein, or: 
    (1) that there has existed in the area substantial and 
persistent unemployment for an extended period of time; 
    (2) that the rate of unemployment, excluding unemployment 
due primarily to temporary or seasonal factors, is currently six 
percent or more as determined by available state or federal 
statistics; and 
    (3) that conditions of chronic unemployment, 
underdevelopment of natural resources and economic depression 
are not likely to be alleviated without public financial or 
planning assistance to provide the economic opportunity for 
private, industrial, recreational, commercial, or manufacturing 
enterprises.  
    In making the determinations under this subdivision, the 
governing body shall consider, among other relevant factors, the 
number of low income farm families in the surrounding farm 
areas, the proportion that such low income families are to the 
total farm families in such areas, the relationship of the 
income levels of the families in each such area to the general 
levels of income in the United States, the current and 
prospective employment opportunities in each such area, the 
extent of migration out of the area, and the proportion of the 
population of each such area which has been receiving public 
assistance from the federal government or from the state.  
    Subd. 2.  [NOTICE; HEARING.] The governing body of a 
municipality shall consider such a resolution only after a 
public hearing thereon after notice appropriate to inform the 
public given not less than 10 nor more than 30 days prior to the 
date of the hearing.  Opportunity to be heard shall be granted 
to all residents of the municipality and its environs and to all 
other interested persons.  The resolution shall be published in 
the same manner in which ordinances are published in the 
municipality.  
    Subd. 3.  [RESOLUTION DEEMED CONCLUSIVE.] When the 
resolution becomes effective it shall be deemed sufficient and 
conclusive for all purposes.  
    Subd. 4.  [FILING; EFFECT.] When the resolution becomes 
effective the clerk of the municipality shall file a certified 
copy thereof with the state agency.  In any suit, action, or 
proceeding involving the validity or enforcement of, or relating 
to any contract of a local agency, the agency shall be 
conclusively deemed to have become established and authorized to 
exercise its powers upon that filing.  Proof of the resolution 
and of that filing may be made in any such suit, action, or 
proceeding by a certificate of the commissioner of energy and 
economic development.  
    Subd. 5.  [BOARD OF COMMISSIONERS.] A local agency shall be 
governed by a board of commissioners appointed by the mayor or 
head of the municipality with the approval of its governing 
body.  The board shall consist of five commissioners who shall 
be residents of the area of operation of the local agency and 
shall be appointed initially for terms of one, two, three, four, 
and five years respectively.  Thereafter all commissioners shall 
be appointed for five year terms.  Each vacancy in an unexpired 
term shall be filled in the same manner in which the original 
appointment was made.  No public officer or employee shall be 
eligible to serve as a commissioner, but a commissioner may be a 
notary public.  
    Subd. 6.  [TERMS; CERTIFICATES.] The commissioners shall 
hold office until their successors have been appointed and 
qualified.  A certificate of appointment of each commissioner 
shall be filed with the clerk of the municipality and a 
certified copy thereof shall be transmitted to the state agency. 
    Sec. 113.  [469.112] [MUNICIPALITIES MAY JOIN TOGETHER.] 
    Subdivision 1.  [JOINT EXERCISE OF POWERS.] Two or more 
municipalities, by agreement entered into through action of 
their governing bodies, may jointly exercise any of the powers 
conferred by sections 110 to 124 after the governing body of 
each of the municipalities has adopted the resolution provided 
for in section 112, subdivision 1.  
    Subd. 2.  [AGREEMENT TERMS.] The agreement shall set forth 
its purpose and the powers to be exercised, and it shall provide 
for the method by which the purpose sought shall be accomplished 
or the manner in which the power shall be exercised.  
    Subd. 3.  [JOINT BOARD.] The agreement shall provide for 
the establishment of a joint board of commissioners to exercise 
on behalf of the entire redevelopment area all of the powers 
authorized or conferred upon any municipality by the terms of 
sections 110 to 124.  The joint board shall be selected from the 
board of commissioners of the municipalities entering into the 
joint agreement and shall be chosen by a vote of the respective 
boards; provided that the governor shall also appoint one member 
to the joint board from the state at large.  The joint board 
shall consist of not less than seven nor more than 11 members.  
    Subd. 4.  [TERMINATION.] The agreement may be continued for 
a definite term or until rescinded or terminated in accordance 
with its terms.  
    Subd. 5.  [DISPOSITION OF PROPERTY AND MONEY.] The 
agreement shall provide for the disposition of any property 
acquired as a result of the joint exercise of powers and the 
return of any surplus moneys in proportion to contributions of 
the several contracting parties after the purpose of the 
agreement has been completed.  
    Subd. 6.  [RESIDENCE REQUIREMENTS INAPPLICABLE.] The 
residence requirements for holding office in any governmental 
unit shall not apply to any officer appointed to carry out any 
such agreement.  
    Sec. 114.  [469.113] [CONFLICT OF INTEREST.] 
    No commissioner or employee of any local agency shall 
acquire any interest, direct or indirect, in any project or in 
any property included or planned to be included in any project, 
nor have any interest, direct or indirect, in any contract or 
proposed contract for materials or service to be furnished or 
used in connection with any project.  This section shall not 
apply to the deposit of any funds of an agency in any bank in 
which a member of an agency shall have an interest, if the funds 
are deposited and protected in accordance with chapter 118. 
    Sec. 115.  [469.114] [AGENCIES; MEETINGS, EXPENSES.] 
    Subdivision 1.  [COMMISSIONERS' AUTHORITY.] The powers of 
each agency shall be vested in the commissioners thereof in 
office at any time, a majority of whom shall constitute a quorum 
for all purposes.  Each agency shall select a chairman and a 
secretary from among its commissioners and shall adopt bylaws 
and other rules for the conduct of its affairs as it deems 
appropriate.  The regular meetings of an agency shall be held in 
a fixed place and shall be open to the public.  No commissioner 
shall receive compensation for his services, but shall be 
entitled to receive necessary expenses, including traveling 
expenses, incurred in the performance of official duties.  
    Subd. 2.  [STAFF SERVICES.] Any municipality within the 
area of operation of the local redevelopment agency may provide 
staff services to the agency, including providing liaison 
between the local agency, the municipality and the state agency, 
and between the local agency and other agencies of the state 
whose facilities and services may be useful to the local agency 
in accomplishing its purposes.  
    Subd. 3.  [REIMBURSEMENT.] The local agency may reimburse 
any municipality or other agency of the state for special 
expenses incurred in the provision of any services or for the 
use of any facilities required by the local agency.  
    Sec. 116.  [469.115] [POWERS OF AGENCIES.] 
    A local agency shall have all the powers necessary or 
convenient to carry out the purposes of sections 110 to 124; 
except that the agencies shall not levy and collect taxes or 
special assessments, nor exercise the power of eminent domain 
unless the governing body of the municipality or municipalities, 
in the case of a joint exercise of power, shall by resolution 
have expressly conferred that power on the agency.  A local 
agency shall also have the following powers in addition to 
others granted in sections 110 to 124: 
    (1) to sue and be sued, to have a seal, which shall be 
judicially noticed, and to alter the same at pleasure; to have 
perpetual succession; and to make, amend, and repeal rules and 
regulations not inconsistent with these sections; 
    (2) to employ an executive director, technical experts, and 
officers, agents and employees, permanent and temporary, that it 
requires, and determine their qualifications, duties, and 
compensation; for legal service it may require, to call upon the 
chief law officer of the municipality or to employ its own 
counsel and legal staff; so far as practical, to use the 
services of local public bodies, in its area of operation.  
Those local bodies, if requested, shall make the services 
available; 
    (3) to delegate to one or more of its agents or employees 
the powers or duties it deems proper; 
    (4) upon proper application by a public body or private 
applicant, and after determining that the purpose of sections 
110 to 124 will be accomplished by the establishment of the 
project in the redevelopment area to approve a redevelopment 
project; 
    (5) to sell, transfer, convey, or otherwise dispose of real 
or personal property or any interest therein, and to execute 
leases, deeds, conveyances, negotiable instruments, purchase 
agreements, and other contracts or instruments, and take action 
that is necessary or convenient to carry out the purposes of 
these sections; 
    (6) within its area of operation to acquire real or 
personal property or any interest therein by gift, grant, 
purchase, exchange, lease, transfer, bequest, devise, or 
otherwise.  An agency may acquire real property which it deems 
necessary for its purposes by exercise of the power of eminent 
domain in the manner provided in chapter 117, after adoption of 
a resolution declaring that the acquisition of the real property 
is necessary to eliminate one or more of the conditions found to 
exist in the resolution adopted pursuant to section 112, 
subdivision 1; 
    (7) to designate redevelopment areas; 
    (8) to cooperate with industrial development corporations, 
state and federal agencies, and private persons or corporations 
in efforts to promote the expansion of recreational, commercial, 
industrial, and manufacturing activity in a redevelopment area; 
    (9) upon proper application by any public body or private 
applicant, to determine whether the declared public purpose of 
these sections has been accomplished or will be accomplished by 
the establishment of a redevelopment project in a redevelopment 
area; 
    (10) to obtain information necessary to the designation of 
a redevelopment area and the establishment of a redevelopment 
project therein; 
    (11) to cooperate with or act as agent for the federal 
government, the state, or any state public body or any agency or 
instrumentality thereof in carrying out the provisions of these 
sections or of any other related federal, state, or local 
legislation; 
    (12) to borrow money or other property and accept 
contributions, grants, gifts, services or other assistance from 
the federal or state government to accomplish the purposes of 
sections 110 to 124;  
    (13) to conduct mined underground space development 
pursuant to sections 136 to 142;  
    (14) to include in any contract for financial assistance 
with the federal government any conditions which the federal 
government may attach to its financial aid of a redevelopment 
project; 
    (15) to issue bonds, notes, or other evidences of 
indebtedness as hereinafter provided, for any of its purposes 
and to secure them by mortgages upon property held or to be held 
by it, or by pledge of its revenues, including grants or 
contributions; and 
    (16) to invest any funds held in reserve or sinking funds, 
or any funds not required for immediate disbursement, in 
property or securities in which savings banks may legally invest 
funds subject to their control.  
    Sec. 117.  [469.116] [BOND ISSUE FOR REDEVELOPMENT 
PURPOSES.] 
    Subdivision 1.  [POWER TO ISSUE.] A local agency may issue 
bonds for any of its corporate purposes.  Subject to the 
limitations of this section, the bonds may be of the type it 
determines, including bonds on which the principal and interest 
are payable exclusively from the income and revenues of the 
project financed with the proceeds of the bonds, or exclusively 
from the income and revenues of certain designated projects, 
whether or not they are financed in whole or in part with the 
proceeds of the bonds.  The bonds may be additionally secured by 
a pledge of any grant or contribution from the federal 
government or other sources, or a pledge of any income or 
revenues of the agency, from the redevelopment project for which 
the proceeds of the bonds are to be used, or a mortgage of any 
project or other property of the agency.  Neither the 
commissioners of any agency nor any person executing the bonds 
shall be liable personally on the bonds.  
    Subd. 2.  [LIABILITY LIMITED.] The bonds and other 
obligations of a local agency shall not be a debt of any 
municipality, the state, or any political subdivision thereof.  
Neither a municipality nor the state or any political 
subdivision thereof shall be liable on the bonds, nor shall the 
bonds or obligations be payable out of any funds or properties 
other than those of the agency.  
    Subd. 3.  [DEBT LIMITATIONS INAPPLICABLE.] The bonds shall 
not constitute an indebtedness within the meaning of any 
constitutional or statutory debt limitation or restriction.  
    Subd. 4.  [BOND CHARACTERISTICS.] The bonds of a local 
agency are declared to be issued for an essential public and 
governmental purpose and to be public instrumentalities.  The 
provisions of these sections exempting from taxation 
redevelopment agencies, their properties and income, shall be 
considered additional security for the repayment of bonds and 
shall constitute a contract between the bondholders, including 
transferees, and the local agencies issuing the bonds.  A local 
agency may confer upon the holder of the bonds the rights and 
remedies it deems necessary or advisable, including the right in 
the event of default to have a receiver appointed to take 
possession of and operate the redevelopment project.  
    Subd. 5.  [TAXABILITY OF TRANSFERRED PROPERTY.] Nothing in 
these sections shall be construed to exempt from taxation any 
property which any local agency sells, leases, conveys, or 
otherwise transfers to private individuals or corporations for 
development, use or operation in connection with a redevelopment 
project.  The property, real or personal, shall have the same 
tax status as if it were owned by private individuals or 
corporations.  
    Subd. 6.  [TERMS OF BONDS.] The bonds of a local agency 
shall be authorized by its resolution and may be issued in one 
or more series.  They shall bear the date or dates, mature at 
the time or times, bear interest at the rate or rates, not 
exceeding six percent per annum, be in the denomination or 
denominations, be in the form, either coupon or registered, 
carry the conversion or registration privileges, have the 
priority, and be subject to the terms of redemption as the 
resolution, its trust indenture or mortgage may provide.  The 
bonds may be sold at public or private sale at not less than par.
    Subd. 7.  [INVESTMENT IN BONDS.] Subject to the approval of 
the state agency, the bonds of a local agency may be declared 
securities in which all public officers and bodies of the state 
and of its municipal subdivisions, all insurance companies and 
associations, all savings banks and savings institutions, 
including savings, building and loan associations, executors, 
administrators, guardians, trustees, and all other fiduciaries 
in the state may properly and legally invest the funds within 
their control.  Each mortgage or issue of bonds shall relate 
only to a single specified project, and those bonds shall be 
secured by a mortgage upon all the real property of which the 
projects consist and shall be first lien bonds, secured by a 
mortgage not exceeding 80 percent of the estimated cost prior to 
the completion of the project, or 80 percent of the appraised 
value or actual cost, but in no event in excess of 80 percent of 
the actual cost, after that completion, as certified by the 
authority.  
    Subd. 8.  [FEDERAL VOLUME LIMITATION ACT.] Sections 474A.01 
to 474A.21 apply to any issuance of obligations under this 
section which are subject to limitation under a federal volume 
limitation act as defined in section 474A.02, subdivision 9, or 
existing federal tax law as defined in section 474A.02, 
subdivision 8. 
    Sec. 118.  [469.117] [EMINENT DOMAIN PROCEEDINGS.] 
    Subdivision 1.  [COMPENSATION.] If a local agency deems 
necessary, it may, after having filed in court an application to 
assess compensation for the property to be appropriated pursuant 
to eminent domain proceedings, forthwith pay into court a sum of 
money to secure compensation to the owner of the appropriated 
property.  The amount shall be fixed by the court in a sum not 
less than the valuation of the property appropriated as fixed by 
the assessor and as finally equalized.  The title to the 
property appropriated shall pass to the local agency upon the 
payment of that sum of money into court.  After 30 days notice 
thereof to the owner, the local agency may enter upon the 
property appropriated and demolish any structure thereon and 
proceed with the construction of the project proposed by it.  No 
property for which condemnation proceedings have been initiated 
shall be demolished until 30 days after the court appointed 
appraisers have made and filed their award.  It shall then 
proceed with the prosecution of its suit to assess compensation 
with due diligence.  The deposit shall be applied, so far as 
necessary for that purpose, to the payment of any award that may 
be made, with interest thereon, and the remainder, if any, shall 
be returned to the local agency.  
    Subd. 2.  [RIGHT OF ACQUISITION.] Real property in a 
redevelopment area that is needed or convenient for a project, 
which is to be acquired by condemnation pursuant to this 
section, may be acquired by the local agency for the project.  
This includes any property devoted to a public use, whether or 
not held in trust, notwithstanding that the property may have 
been previously acquired by condemnation or is owned by a public 
utility corporation, it being determined that the public use in 
conformity with the provisions of sections 110 to 124 shall be 
deemed a superior public use.  Property devoted to a public use 
may be so acquired only if the governing body of the 
municipality has approved its acquisition by the local agency.  
An award of compensation shall not be increased by reason of any 
increase in the value of the real property caused by the 
assembly, clearance or reconstruction, or proposed assembly, 
clearance or reconstruction for the purposes of sections 110 to 
124 of the real property in an area.  
    Sec. 119.  [469.118] [LOANS TO REDEVELOPMENT AGENCIES.] 
    Subdivision 1.  [CONDITIONS FOR MAKING.] When it has been 
determined by the authority upon application of a local agency 
that the establishment of a particular redevelopment project in 
a redevelopment area has accomplished or will accomplish the 
public purposes of sections 110 to 124, the authority may 
contract to loan the local agency an amount not in excess of 20 
percent of the cost or estimated cost of the redevelopment 
project, subject to the following conditions: 
    (a) In the case of a redevelopment project to be 
established, 
    (1) the authority shall have first determined that the 
local agency holds funds in an amount equal to, or property of a 
value equal to not less than, 10 percent of the estimated cost 
of establishing the redevelopment project, which funds or 
property are available for and shall be applied to the 
establishment of the project.  If a public facility within the 
redevelopment area has been or may be constructed and will 
benefit a redevelopment project, the imputed value of the 
benefit of the facility to the redevelopment project may be 
determined and the estimated cost thereof credited to the local 
agency for the purpose of satisfying the requirements of this 
subparagraph.  For purposes of this section, a public facility 
includes utility installations, street improvements, public 
buildings, parks, playgrounds, schools, recreational buildings, 
and parking facilities; 
    (2) the authority shall have also determined that the local 
agency has obtained from other sources, by gift, grant, or loan 
from private or other state or federal sources, a firm 
commitment for all other funds, over and above the loan of the 
state agency, and such funds or property as the redevelopment 
agency may hold, necessary for payment of all the estimated cost 
of establishing the redevelopment project, and that the sum of 
all these funds, together with the machinery and equipment to be 
provided by the owner or operator of the redevelopment project 
is adequate to insure completion and operation of the plant, 
enterprise, or facility. 
    (b) In the case of a redevelopment project established 
without initial state or local agency participation, 
    (1) the state agency shall have first determined that the 
local or area redevelopment agency has expended funds in an 
amount equal to, or has applied property of a value equal to, 
not less than 10 percent of the cost of establishing the 
redevelopment project.  If a public facility within the 
redevelopment area has been or may be constructed and will 
benefit a redevelopment project, the imputed value of the 
benefit of the facility to the redevelopment project may be 
determined and the estimated cost thereof credited to the local 
agency for the purpose of satisfying the requirements of this 
subparagraph;  
    (2) the authority shall have also determined that the local 
agency has obtained from other public or private sources other 
funds necessary for payment of all the cost of establishing the 
redevelopment project, and that the local agency participation 
and these funds, together with the machinery and equipment 
provided by the owner or operator of the redevelopment project 
has been adequate to insure completion and operation of the 
plant, enterprise, or facility.  The proceeds of any loan made 
by the authority to a local agency pursuant to this paragraph 
shall be used only for the establishment of additional 
redevelopment projects in furtherance of the public purposes of 
sections 110 to 124. 
    Subd. 2.  [TERMS.] Any such loan of the authority shall be 
for the period of time and shall bear interest at the rate 
determined by the authority.  It may be secured by a mortgage on 
the redevelopment project for which the loan was made.  The 
mortgage may be second and subordinate only to the mortgage 
securing the first lien obligation, if any, issued to secure the 
commitment of funds from a private or public source and used in 
the financing of the redevelopment project. 
    Subd. 3.  [SOURCE.] Money loaned by the authority to the 
local agency shall be withdrawn from the Minnesota account 
established by section 122, and paid over to the local agency in 
the manner provided by the rules of the authority. 
    Subd. 4.  [DEPOSIT OF PAYMENTS.] All payments of interest 
on the loans and repayments of principal shall be deposited by 
the authority in the Minnesota account and shall be available to 
be applied and reapplied to carry out the purposes of sections 
110 to 124. 
    Subd. 5.  [ADJUSTMENT OF PARTICIPATION RATIOS.] When any 
agency of the federal government participates in the financing 
of a redevelopment project by loan, grant, or otherwise, the 
authority may adjust the required ratios of financial 
participation by the local agency, the owner or operator of the 
redevelopment project, and the authority to insure that the 
maximum benefits of federal participation will be available to 
the local agency, the authority, or both.  No adjustment of 
ratios shall permit the authority to grant a loan to the local 
agency in excess of 30 percent of the cost or estimated cost of 
the redevelopment project. 
    Subd. 6.  [FEDERAL SECURITY.] If any federal agency 
participating in the financing of a redevelopment project is not 
permitted to take as security for the participation a mortgage, 
the lien of which is junior to any other mortgage, the authority 
or local agency may take as security for its loan to the project 
or local agency, a mortgage junior in lien to that of the 
federal agency. 
    Subd. 7.  [INDIAN PROJECTS.] In the case of any 
redevelopment project to be established or assisted by 
participation of an Indian organization, the Indian organization 
shall establish to the satisfaction of the authority that the 
project is an Indian economic enterprise. 
    Subd. 8.  [STATE AUTHORITY.] Where a local development 
corporation or a local agency does not exist or is financially 
unable to participate in a proposed redevelopment project, the 
authority may accept loan applications from, and make loans 
directly to, private enterprises.  The loans are subject to the 
same conditions and procedures as loans to local agencies 
provided that the city, town, or county government having 
jurisdiction over the redevelopment project area passes and 
files with the authority a resolution in support of the 
redevelopment project stipulating the project's economic benefit 
to the area involved.  Where a city or town as well as a county 
has jurisdiction, the support or opposition of the city or town 
government shall prevail over the support or opposition of the 
county government in determining whether or not to accept the 
application. 
    Subd. 9.  [TECHNICAL ASSISTANCE LOANS.] The authority may 
provide technical assistance loans from the Minnesota account 
for the development and planning of redevelopment projects.  The 
technical assistance loans may be provided through the payment 
of money to:  (1) other state agencies or departments; (2) the 
employment of private individuals; (3) the employment of public, 
private, or nonprofit firms; (4) state, area, district, or local 
organizations; or (5) other nonprofit institutions.  Money 
awarded pursuant to clauses (2) and (3) shall be in the form of 
loans and shall be repaid unless the project is deemed 
unfeasible by the authority.  The authority shall require the 
repayment of some or all technical assistance money and shall 
prescribe the terms and conditions of the repayment.  The amount 
of technical assistance loans is limited to an aggregate of ten 
percent of the money available in the Minnesota account.  The 
technical assistance loans shall not be included when computing 
the 20 percent limitation provided in section 121.  The 
authority may loan technical assistance money in cooperation 
with the technical assistance grant programs of any agency of 
the federal government.  The authority may prescribe rules to 
carry out the purposes of this subdivision. 
    Sec. 120.  [469.119] [LOAN APPLICATION REQUIREMENTS.] 
    Subdivision 1.  [APPLICATION CONTENTS.] Prior to the 
loaning of any funds for a redevelopment project in a 
redevelopment area the local agency shall receive from the 
applicant and, in the case of authority participation, shall 
forward to the state agency a loan application.  The application 
shall be in the form adopted by the local agency, and shall 
contain among other things the following information: 
    (1) a general description of the redevelopment project and 
of the industrial, recreational, commercial, or manufacturing 
enterprise for which the project has been or is to be 
established; 
    (2) a legal description of all real estate necessary for 
the project; 
    (3) plans and other documents as may be required to show 
the type, structure, and general character of the redevelopment 
project; 
    (4) a general description of the type, classes, and number 
of employees employed or to be employed in the operation of the 
redevelopment project; and 
    (5) cost or estimates of cost of establishing the 
redevelopment project.  
    Subd. 2.  [ADDITIONAL REQUIREMENTS FOR AUTHORITY PROJECTS.] 
If authority participation in the financing of any redevelopment 
project is sought the local agency shall submit a loan 
application containing the information described in subdivision 
1, together with the following additional information: 
    (1) A general description and statement of value of any 
property, real or personal, of the local agency applied or to be 
applied to the establishment of the project; 
    (2) A statement of cash funds previously applied or then 
held by the local agency which are available for and are to be 
applied to the establishment of the redevelopment project; 
    (3) Evidence of the arrangement made by the local agency 
for the financing of all costs of the redevelopment project over 
and above the participation of the local agency; 
    (4) In the case of a lease of property by the local agency 
a general description of the tenant to whom the local agency has 
leased or will lease any property in connection with the 
redevelopment project, or, in the case of the sale of property 
by the local agency in connection with a redevelopment project, 
the buyer to whom the local agency has sold or will sell the 
project; 
    (5) A general description of the form of lease or sales 
agreement entered into or to be entered into by and between the 
local agency and its tenants or purchasers; and 
    (6) Evidence that the establishment of the redevelopment 
project will not cause the removal of an industrial, 
recreational, commercial, or manufacturing plant or facility 
from one area of the state to another.  
    Subd. 3.  [AUTHORITY DUTIES.] The authority shall hold 
hearings and make investigations as to each loan application 
received as necessary to determine whether the purposes of 
sections 110 to 124 will be accomplished by the granting of a 
requested loan.  In carrying out its duties under those 
sections, the authority may delegate to other agencies of state 
government the powers, duties, and responsibilities it 
determines necessary or appropriate to accomplish the purposes 
of sections 110 to 124.  The other agencies shall perform the 
functions and duties delegated pursuant to this subdivision.  
    Subd. 4.  [NOT STATE OBLIGATIONS.] Nothing in sections 110 
to 124 shall empower the authority to give, pledge, or loan the 
credit or taxing power of the state, nor shall any of the 
obligations of the authority be deemed to be obligations of the 
state or any of its political subdivisions.  
    Sec. 121.  [469.120] [PARTICIPATION IN FEDERAL LOANS OR 
GUARANTEES.] 
    The authority may participate with the appropriate federal 
agency under the Rural Development Act of 1972, the Public Works 
and Economic Development Act of 1965, or the Small Business Act 
in the financing of redevelopment projects.  The participation 
may take the form of loans or guarantees of any balance 
remaining after federal participation.  The loans or guarantees 
shall be made subject to the conditions and limitations set 
forth in sections 119 and 120.  A loan or guarantee shall not 
exceed 20 percent of the total cost of the project.  The total 
guarantees outstanding at any time shall not exceed five times 
the balance in the Minnesota account.  
    Sec. 122.  [469.121] [MINNESOTA ACCOUNT.] 
    Subdivision 1.  [ACCOUNT CREATED.] In the economic 
development fund created in section 116M.06, subdivision 4, 
there is created a Minnesota account, to be used by the 
authority in the manner and for the purposes provided in 
sections 110 to 124. 
    Subd. 2.  [LOANS; REVOLVING ACCOUNT.] The authority may 
draw upon the Minnesota account the amounts the authority 
determines for loans to local agencies for the financing and 
planning of redevelopment projects.  When the amounts so 
allocated by the authority as loans to local agencies are repaid 
to the authority pursuant to the terms of its agreements with 
the local agency, the authority shall pay the amounts into the 
Minnesota account.  All appropriations and payments made to it 
may be applied and reapplied to the purposes of sections 110 to 
124 and shall not revert to the general fund of the state. 
    Subd. 3.  [EXCESS MONEY.] If the authority determines that 
money held for the credit of the Minnesota account is in excess 
of the amounts needed by the authority to carry out the purposes 
of sections 110 to 124, the authority may by resolution release 
the excess from the account and transfer it to the general fund 
of the state treasury. 
    Subd. 4.  [MATCHING MONEY.] The authority may utilize any 
money in the Minnesota account for the purpose of matching 
federal money available under the Public Works and Economic 
Development Act of 1965. 
    Sec. 123.  [469.122] [LIMITATION OF POWERS.] 
    The state pledges to the United States or any agency 
thereof that if any federal agency shall construct, loan, or 
contribute any funds for the construction, extension, 
improvement, or enlargement of any redevelopment project, or any 
portion thereof, the state will not alter or limit the rights 
and powers of the authority or the local agency in any manner 
inconsistent with the performance of any agreements between the 
authority or the local agency and any such federal agency.  The 
authority and the local agency shall continue to have all powers 
herein granted, so long as the same shall be necessary or 
desirable for the carrying out of the purposes of these sections.
    Sec. 124.  [469.123] [EXAMINATION AND AUDIT OF LOCAL 
AGENCY.] 
    The accounts, books and records of any local or area 
agency, including its receipts, disbursements, contracts, 
mortgages, investments and other matters relating to its 
finances, operation and affairs shall be examined and audited 
from time to time by the state auditor as provided by law.  

                       CITY DEVELOPMENT DISTRICTS 
    Sec. 125.  [469.124] [PURPOSE.] 
    The legislature finds that there is a need for new 
development in areas of a city that are already built up in 
order to provide employment opportunities, to improve the tax 
base, and to improve the general economy of the state.  
Therefore, cities are authorized to develop a program for 
improving a district of the city to provide impetus for 
commercial development; to increase employment; to protect 
pedestrians from vehicle traffic and inclement weather; to 
provide the necessary linkage between peripheral parking 
facilities and places of employment and shopping; to provide 
off-street parking to serve the shoppers and employees of the 
district; to provide open space relief within the district; and 
to provide other facilities as are outlined in the development 
program adopted by the governing body.  The legislature declares 
that the actions required to assist the implementation of these 
development programs are a public purpose and that the execution 
and financing of these programs are a public purpose. 
    Sec. 126.  [469.125] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 125 to 135, the 
terms defined in this section have the meanings given them 
herein unless the context indicates a different meaning.  
    Subd. 2.  [CITY.] "City" means any home rule charter or 
statutory city. 
    Subd. 3.  [DEVELOPMENT PROGRAM.] A "development program" is 
a statement of objectives of the city for improvement of a 
development district which contains a statement as to the public 
facilities to be constructed within the district, the open space 
to be created, the environmental controls to be applied, the 
proposed reuse of private property, and the proposed operations 
of the district after the capital improvements within the 
district have been completed.  
    Subd. 4.  [PEDESTRIAN SKYWAY SYSTEM.] "Pedestrian skyway 
system" means any system of providing for pedestrian traffic 
circulation, mechanical or otherwise, elevated aboveground, 
within and without the public right of way, and through or above 
private property and buildings, and includes overpasses, 
bridges, passageways, walkways, concourses, hallways, corridors, 
arcades, courts, plazas, malls, elevators, escalators, heated 
canopies and accesses and all fixtures, furniture, signs, 
equipment, facilities, services, and appurtenances which in the 
judgment of the governing body of the city will enhance the 
movement, safety, security, convenience and enjoyment of 
pedestrians and benefit the city and adjoining properties.  The 
use of a public street or public right-of-way for pedestrian 
skyway travel only constitutes a public use and shall not 
require a vacation of the street or right-of-way. 
    Subd. 5.  [SPECIAL LIGHTING SYSTEMS.] "Special lighting 
systems" means lights or light displays of any type located 
within or without the public right-of-way. 
    Subd. 6.  [PARKING STRUCTURE.] "Parking structure" means 
any building the principal use of which is designed for and 
intended for parking of motor vehicles or any parking lot.  
    Subd. 7.  [MAINTENANCE AND OPERATION.] "Maintenance and 
operation" means all activities necessary to maintain facilities 
after they have been developed and all activities necessary to 
operate the facilities including informational and educational 
programs, and safety and surveillance activities.  
    Subd. 8.  [GOVERNING BODY.] "Governing body" means the city 
council.  
    Subd. 9.  [DEVELOPMENT DISTRICT.] A "development district" 
is an area within the corporate limits of a city which has been 
so designated and separately numbered by the governing body.  
    Sec. 127.  [469.126] [AUTHORITY GRANTED.] 
    Subdivision 1.  [DESIGNATION OF DISTRICTS.] A city may 
designate development districts within the boundaries of the 
city.  Before designating a district, the city must consult with 
its planning agency or department and must hold a public hearing 
on the designation.  Notice of the hearing must be published in 
the official newspaper of the city or, if there is no official 
newspaper, in a newspaper of general distribution in the city.  
The city shall also provide for relocation pursuant to section 
134 and consult with the advisory board created by section 133 
before making this designation.  
    Subd. 2.  [POWERS.] Within these districts the city may: 
    (1) adopt a development program consistent with which the 
city may acquire, construct, reconstruct, improve, alter, 
extend, operate, maintain, or promote developments aimed at 
improving the physical facilities, quality of life and quality 
of transportation; 
    (2) acquire land or easements through negotiation or 
through powers of eminent domain; 
    (3) adopt ordinances regulating traffic in pedestrian 
skyway systems, public parking structures, and other facilities 
constructed within the development district.  Traffic 
regulations may include direction and speed of traffic, policing 
of pedestrianways, hours that pedestrianways are open to the 
public, kinds of service activities that will be allowed in 
arcades, parks and plazas, and rates to be charged in the 
parking structures; 
    (4) adopt ordinances regulating access to pedestrian skyway 
systems and the conditions under which such access is allowed;  
    (5) designate districts for mined underground space 
development under sections 136 to 142; 
    (6) require private developers to construct buildings so as 
to accommodate and support pedestrian systems which are part of 
the program for the development district.  When the city 
requires the developer to construct columns, beams or girders 
with greater strength than required for normal building 
purposes, the city shall reimburse the developer for the added 
expense from development district funds;  
    (7) install special lighting systems, special street signs 
and street furniture, special landscaping of streets and public 
property, and special snow removal systems; 
    (8) acquire property for the district; 
    (9) lease or sell air rights over public buildings and 
spend public funds for constructing the foundations and columns 
in the public buildings strong enough to support the buildings 
to be constructed on air rights; 
    (10) lease all or portions of basement, ground and second 
floors of the public buildings constructed in the district; and 
    (11) negotiate the sale or lease of property for private 
development if the development is consistent with the 
development program for the district.  
    Sec. 128.  [469.127] [TAX STATUS.] 
    The pedestrian skyway system, underground pedestrian 
concourse, the people mover system, and publicly owned parking 
structures are declared to be public property to be used for 
essential public and governmental purposes.  They are exempt 
from all taxes and special assessments of the city, county, 
state, or any political subdivision thereof.  Taxes do not 
include charges for utilities and special services such as heat, 
water, electricity, gas, sewage disposal, or garbage removal.  
    Sec. 129.  [469.128] [GRANTS.] 
    A city may accept grants or other financial assistance from 
the government of the United States or any other entity to do 
studies, construct and operate the pedestrian skyway system, 
underground pedestrian concourses, people mover systems, and 
other public improvements authorized by sections 125 to 135.  
    Sec. 130.  [469.129] [ISSUANCE OF BONDS.] 
    Subdivision 1.  [GENERAL OBLIGATION BONDS.] The governing 
body may authorize, issue, and sell general obligation bonds to 
finance the acquisition and betterment of real and personal 
property needed to carry out the development program within the 
development district together with all relocation costs 
incidental thereto.  The bonds shall mature within 30 years from 
the date of issue and shall be issued in accordance with 
sections 475.51, 475.53, 475.54, 475.55, 475.56, 475.60, 475.61, 
475.62, 475.63, 475.65, 475.66, 475.69, 475.70, 475.71.  All tax 
increments received by the city pursuant to Minnesota Statutes 
1986, section 472A.08, shall be pledged for the payment of these 
bonds and used to reduce or cancel the taxes otherwise required 
to be extended for that purpose.  The bonds shall not be 
included when computing the city's net debt.  Bonds shall not be 
issued under this paragraph subsequent to August 1, 1979.  
    Subd. 2.  [REVENUE BONDS.] A city may authorize, issue and 
sell revenue bonds under section 179, subdivision 4, to refund 
the principal of and interest on general obligation bonds 
originally issued to finance a development district, or one or 
more series of bonds one of which series was originally issued 
to finance a development district, for the purpose of relieving 
the city of restrictions on the application of tax increments or 
for other purposes authorized by law.  The refunding bonds shall 
not be subject to the conditions set out in section 475.67, 
subdivisions 11 and 12.  Tax increments received by the city 
with respect to the district may be used to pay the principal of 
and interest on the refunding bonds and to pay premiums for 
insurance or other security guaranteeing the payment of their 
principal and interest when due.  Tax increments may be applied 
in any manner permitted by section 177, subdivisions 2 and 4. 
    Sec. 131.  [469.130] [MAINTENANCE AND OPERATION.] 
    Maintenance and operation of the pedestrian systems, 
special lighting systems, parking structures, and other public 
improvements constructed under provisions of sections 125 to 135 
shall be under the supervision of the administrator as 
designated in section 132.  The cost of maintenance and 
operation of the nonrevenue facilities together with the excess 
costs of operation and maintenance of revenue producing 
facilities, if any, shall be charged against the development 
district in which it is located.  The amount of assessment 
against each property within the district shall be in proportion 
to the benefit to the several properties within the district.  
By July 1 of each year the administrator of the development 
district shall submit to the governing body of the city the 
maintenance and operating budget for the following year, and the 
pro rata share of the budget to be charged to each property in 
the district.  The governing body of the city shall certify the 
assessments to the county auditor for collection.  The governing 
body shall levy these assessments in accordance with the 
procedures established in section 429.061.  
    Sec. 132.  [469.131] [ADMINISTRATION.] 
    The governing body of a city may create a department or 
designate an existing department, office, or agency or city 
housing or redevelopment authority, to administer all districts 
authorized under sections 125 to 135.  The head of this 
department may, subject to rules and limitations adopted by the 
governing body, be granted the following powers: 
    (1) to acquire property or easements through negotiation; 
    (2) to enter into operating contracts on behalf of the city 
for operation of any of the facilities authorized to be 
constructed under the terms of sections 125 to 135; 
    (3) to lease space to private individuals or corporations 
within the buildings constructed under the terms of sections 125 
to 135; 
    (4) to lease or sell land and to lease or sell air rights 
over structures constructed under the authority of sections 125 
to 135; 
    (5) to enter into contracts for construction of the several 
facilities or portion thereof authorized under sections 125 to 
135; 
    (6) to contract with the housing and redevelopment 
authority of the city for the administration of any or all of 
the provisions of sections 125 to 135; 
    (7) to certify to the governing body for acquisition 
through eminent domain property that cannot be acquired by 
negotiation, but is required for implementation of the 
development program; 
    (8) to certify to the governing body the amount of funds, 
if any, which must be raised through sale of bonds to finance 
the program for development districts; and 
    (9) to apply for grants from the United States of America 
and from other sources.  
    Sec. 133.  [469.132] [ADVISORY BOARD.] 
    Subdivision 1.  [CREATION; MEMBERS; DUTIES.] The governing 
body may create an advisory board except in cities of the first 
class where the governing body shall create an advisory board.  
Except as provided in subdivision 2, a majority of the members 
shall be owners or occupants of real property located in or 
adjacent to the development district which they serve.  The 
advisory board shall advise the governing body and the 
administrator on the planning, construction and implementation 
of the development program, and maintenance and operation of the 
district after the program has been completed.  
    Subd. 2.  [SUBSTANTIALLY RESIDENTIAL DISTRICTS.] In a 
substantially residential development district the board shall 
be comprised of owners and occupants of real property within or 
adjacent to the district's boundaries.  The board may be 
appointed or elected according to guidelines established by the 
governing body, provided that the board in the cities of St. 
Paul and Minneapolis must be elected.  For purposes of this 
subdivision a "substantially residential development district" 
is a development district in which 40 percent or more of the 
land area, exclusive of streets and open space, is used for 
residential purposes at the time the district is designated by 
the governing body.  
    Subd. 3.  [POWERS.] The governing body shall by resolution 
delineate the respective powers and duties of the advisory board 
and the planning staff or agency.  The resolution shall 
establish reasonable time limits for approval by the advisory 
board of the phases of the development program, and provide a 
mechanism for appealing to the governing body for a final 
decision when conflicts arise between the advisory board and the 
planning staff or agency, regarding the development program.  
    Sec. 134.  [469.133] [RELOCATION.] 
    Unless they desire otherwise, provision must be made for 
relocation of all persons who would be displaced by a proposed 
development district prior to displacement in accordance with 
the provisions of sections 117.50 to 117.56.  Prior to 
undertaking any relocation of displaced persons, the governing 
body of a city shall insure that housing and other facilities of 
at least comparable quality be made available to the persons to 
be displaced.  
    Sec. 135.  [469.134] [EXISTING PROJECTS.] 
    Sections 125 to 135 do not affect any project or program 
using tax increment financing which was approved by a city 
council under Laws 1971, chapter 548 or 677, or Laws 1973, 
chapter 196, 761 or 764, prior to July 1, 1974, and such 
projects or programs may be completed and financed in accordance 
with the provisions of the laws under which they were initiated 
notwithstanding any provision of this law.  Provided, however, 
that Laws 1971, chapters 548 and 677, and Laws 1973, chapters 
196, 761 and 764, are hereby specifically superseded, except as 
to those projects or programs which have been approved prior to 
July 1, 1974. 

                  MINED UNDERGROUND SPACE DEVELOPMENT 
    Sec. 136.  [469.135] [POLICY.] 
    The legislature finds that many subsurface areas of the 
state have a largely undeveloped potential to be mined for the 
development of underground space.  The development and 
redevelopment of mined underground space makes use of the 
state's special geologic resources, fosters wise land use, 
especially in built-up urban areas, encourages commercial and 
industrial development, increases employment opportunities, 
enhances the tax base, contributes to the preservation of 
agricultural and other open lands, permits more energy efficient 
development and promotes and protects the public welfare.  
    Therefore, the legislature finds that it is in the public 
interest to authorize cities to encourage, promote, and enable 
both public and private development of mined underground space 
and to authorize cities to protect both subsurface areas 
potentially suitable for development and existing mined 
underground space. 
    Sec. 137.  [469.136] [DEFINITIONS.] 
    Subdivision 1.  [TERMS DEFINED.] In sections 136 to 142, 
the terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning. 
    Subd. 2.  [AUTHORITY.] "Authority" means an authority, as 
defined in section 175, subdivision 2. 
    Subd. 3.  [MINED UNDERGROUND SPACE.] "Mined underground 
space" means space resulting from, or which will result from, 
the excavation of subsurface areas by underground mining methods 
and having limited access from and to the surface and the 
supporting material surrounding the space. 
    Subd. 4.  [MINED UNDERGROUND SPACE DEVELOPMENT.] "Mined 
underground space development" means the development or 
redevelopment of mined underground space for commercial, 
industrial, and other public and private use, but does not 
include the development or redevelopment of mined underground 
space for long-term storage or disposal of hazardous waste or 
high level nuclear waste. 
    Subd. 5.  [CITY.] "City" means a home rule charter or 
statutory city. 
    Subd. 6.  [PROJECT.] "Project" means a project encompassing 
mined underground space development. 
    Subd. 7.  [PROJECT COSTS.] "Project costs" mean all costs 
and estimated costs incurred and to be incurred by a city or by 
any other person in connection with the acquisition, 
construction, reconstruction, improvement, betterment, and 
extension of a project, including all engineering, 
architectural, legal, fiscal, and administrative fees and 
expenses, interest on money borrowed to pay project costs during 
construction and for a period up to six months thereafter, title 
insurance premiums, rating agency fees, printing expenses, 
underwriters' commission or discount, bond insurance or other 
credit enhancement premiums or fees, bond trustee fees, and, for 
bonds that are not general obligation bonds, a debt service 
reserve. 
    Subd. 8.  [PROPERTY RIGHTS.] The words "interest in land," 
"land," "property," "property right," "property interest," and 
other terms describing real property include airspace necessary 
for the development of projects in subsurface areas. 
    Sec. 138.  [469.137] [POWERS OF CITY.] 
    A city may, to accomplish the purposes of this chapter: 
    (1) exercise any powers granted in sections 49 to 69, but 
only if the city has authority to exercise the powers granted in 
sections 1 to 47, 49 to 69, 91 to 135, and 153 to 166, in 
conjunction with the powers granted by sections 136 to 142; 
    (2) provide public facilities pursuant to chapters 429, 
430, and any charter provision or any special law; 
    (3) acquire, by lease, purchase, gift, condemnation, or 
otherwise, land or interests in land, and convey land or 
interests in land.  A city may acquire by condemnation any 
property, property right or interest in property, corporate or 
incorporeal, within its boundaries that may be needed by it for 
a project, for access, including surface and subsurface access, 
for ventilation, or for any other purpose which it finds by 
resolution to be needed by it in connection with mined 
underground space development.  The fact that the needed 
property or interest in property has been acquired by the owner 
under the power of eminent domain, or is already devoted to a 
public use, or is owned by the University of Minnesota, any 
city, county, school district, town, or other governmental 
subdivision, railroad, or public or private utility, shall not 
prevent its acquisition by the city by the exercise of the right 
of eminent domain, provided the existing use is not impaired.  
The necessity of the taking of any property or interest in 
property by the city shall be determined by a resolution adopted 
by the governing body of the city, which shall describe the 
property or interest as nearly as it may be described and state 
the use and purpose to which it is to be devoted.  Except as 
otherwise provided in sections 136 to 142, the right of eminent 
domain shall be exercised in accordance with chapter 117, 
provided that any exercise of the right of eminent domain hereby 
conferred shall not be for the purpose of preventing the 
development, mining, and use of mineral resources; 
    (4) acting alone or with others, acquire, purchase, 
construct, lease, mortgage, maintain, operate, and convey 
projects; 
    (5) borrow money to carry out the purposes of sections 136 
to 142; 
    (6) enter into contracts, sue and be sued and do or 
accomplish all other acts and things necessary or convenient to 
carry out the purposes and policies of sections 136 to 142; and 
    (7) exercise bonding authority as provided in section 139.  
    Sec. 139.  [469.138] [BONDING AUTHORITY.] 
    A city may by resolution of its governing body authorize 
the issuance of bonds to provide funds for payment of project 
costs incurred and to be incurred in the acquisition or 
betterment of projects, or for refunding any outstanding bonds 
issued by it for any such purpose.  The city may pledge to the 
payment of the bonds and the interest thereon, its full faith, 
credit, and taxing powers, or the proceeds of any designated tax 
levies, or the gross or net revenues to be derived from any 
project operated by or for the city, or any combination 
thereof.  Taxes levied for the payment of the bonds and interest 
are not subject to levy limits.  Bonds issued pursuant to this 
section may be sold at public or private sale upon the 
conditions the governing body of the city determines, except 
that any bonds to which the full faith and credit and taxing 
powers of the city are pledged shall be sold in accordance with 
the provisions of section 475.60.  
    Sec. 140.  [469.139] [DELEGATION BY CITY.] 
    Any of the powers provided in sections 138 and 139 may be 
exercised by the governing body of a city.  Alternatively, the 
governing body of a city may, by ordinance or resolution, 
delegate to an authority any or all of the powers provided in 
sections 138 and 139.  An ordinance or resolution delegating 
powers to an authority shall specify the powers delegated and 
any conditions to that delegation.  Any power not expressly 
delegated to the authority may not be exercised by the 
authority, but may be exercised by the governing body of the 
city.  To the extent a power is delegated to an authority, any 
action of the governing body of the authority shall be 
considered to be the action of the governing body of the city.  
The governing body of a city may at any time by ordinance or 
resolution, whichever was used to delegate powers to an 
authority, repeal, rescind, or revoke any or all of the powers 
previously delegated to an authority, but the city remains 
liable for all actions previously taken and contracts previously 
made by the authority. 
    Sec. 141.  [469.140] [PROJECTS DESCRIBED IN MUNICIPAL 
INDUSTRIAL DEVELOPMENT LAW.] 
    If and to the extent any project proposed to be undertaken 
by a city also constitutes a project as defined in section 154, 
the provisions of sections 153 to 166 shall apply to the 
undertaking and financing of that project by the city, except 
that to the extent the governing body of a city has delegated 
powers to an authority as provided in section 119 those powers 
may be exercised under sections 153 to 166 by the authority. 
    Sec. 142.  [469.141] [REGULATION OF DRILLING TO PROTECT 
MINED UNDERGROUND SPACE DEVELOPMENT.] 
    Subdivision 1.  [DEPARTMENT OF NATURAL RESOURCES REVIEW.] 
The department of natural resources shall review all project 
plans that involve dewatering of underground formations for 
construction and operation of mined underground space to 
determine the effects of the proposal on the quality and 
quantity of underground waters in and adjacent to the areas 
where the mined underground space is to be developed.  
    Subd. 2.  [POWER TO REGULATE.] Cities may regulate all 
drilling, except water well and exploratory drilling that is 
subject to the provisions of sections 156A.01 to 156A.10, above, 
in, through, and adjacent to subsurface areas designated for 
mined underground space development and existing mined 
underground space.  The regulations may prohibit, restrict, 
control, and require permits for such drilling.  
    Subd. 3.  [WATER WELL REGULATION.] Cities may prohibit, 
restrict, control, and require permits for drilling of water 
wells as defined in section 156A.02, but the construction and 
abandonment of water wells is governed by sections 156A.01 to 
156A.10.  
    Subd. 4.  [PERMITS FOR WATER REMOVAL.] No mined underground 
space project involving or affecting the quality and quantity of 
underground waters may be developed until a permit for the 
appropriation of waters pursuant to section 105.41, has been 
granted by the commissioner of natural resources. 

                RURAL DEVELOPMENT FINANCING AUTHORITIES 
    Sec. 143.  [469.142] [PURPOSES.] 
    The purposes of a rural development financing authority are:
    (1) to acquire, construct, improve and equip projects 
comprising real and personal property within or outside the 
state, used or useful for producing or processing products of 
agriculture, including assembling, fabricating, manufacturing, 
mixing, storing, warehousing, distributing, or selling; 
    (2) to investigate, improve and develop methods of 
constructing, operating and financing such projects; 
    (3) to provide for the operation and maintenance of each 
project under an operating or lease agreement with a person, 
firm, or corporation considered qualified by experience and 
financial resources to assure that to the limit of its design 
and capacity it will make facilities for efficient and 
economical processing of agricultural products available 
throughout the term of the agreement to all producers 
contracting therefor; 
    (4) to promote agricultural, industrial and scientific 
research in cooperation with state institutions of higher 
learning and profit or nonprofit private corporations, 
associations or foundations; 
    (5) to assist in promoting new job opportunities through 
the development of natural resources and the agricultural 
industry by cooperating with private companies and with agencies 
of the federal and state governments and with agencies and 
political subdivisions of other states and of foreign nations to 
engage in the processing of agricultural products; 
    (6) to enter into contracts with or to employ financial, 
management, and production consultants, and scientific and 
economic specialists to develop and assist in promoting the 
purposes of the authority and to assist in operating, 
maintaining, constructing and financing authority projects; 
    (7) to employ a financial management company to assist in 
organizing, initiating, developing and operating projects for 
the authority under terms and conditions agreed upon between the 
authority and the company and to include any fee charged or to 
be charged by the company in the total capital costs of each 
project to be financed; and 
    (8) to provide financial or other assistance to rail users 
as defined in section 222.48, subdivision 6, for the purpose of 
making capital investment loans for rail line rehabilitation. 
    Sec. 144.  [469.143] [DEFINITIONS.] 
    In sections 143 to 152, the term "agriculture" includes 
forestry and timber production and the phrase "producing 
products of agriculture" does not include acquiring agricultural 
land.  
    Sec. 145.  [469.144] [ESTABLISHMENT; BOARD.] 
    Subdivision 1.  [ESTABLISHMENT.] Any county or combination 
of counties by resolution of the county board or boards may 
establish a rural development financing authority as a public 
nonprofit corporation.  An authority has the powers and duties 
conferred and imposed on a private nonprofit corporation by 
chapter 317, except as otherwise or additionally provided 
herein.  No such authority shall transact any business or 
exercise any powers until a certified copy of the resolutions of 
each participating county board has been submitted to the 
secretary of state and a certificate of incorporation issued 
pursuant to section 317.10.  Each resolution shall include all 
of the provisions required by section 317.08, subdivision 2.  
Alternatively, a county may determine by resolution of the 
county board to exercise the powers granted in this chapter to a 
rural development finance authority; no filing is required. 
    Subd. 2.  [BOARD.] Each rural development financing 
authority shall be managed and controlled by a board of 
directors consisting of that number of persons equal to the 
number of counties establishing the authority, but in no case 
less than five.  The directors shall be elected by the 
establishing county board or boards and each county board shall 
have one vote.  The directors initially elected shall serve 
staggered terms designated by the electing board or boards.  
Thereafter, all directors shall be elected for five year terms 
and until their successors are elected and qualify.  Each 
vacancy in an unexpired term shall be filled in the manner in 
which the original appointment was made.  Each director shall be 
a resident of the establishing county and no director shall hold 
any other public office or be an officer, employee, director, 
shareholder, or member of any corporation, firm, or association 
with which the authority has entered into any operating or lease 
agreement.  Directors may be removed by the appointing board or 
boards for the reasons and in the manner prescribed by section 
10, and shall receive no compensation other than reimbursement 
for expenses incurred in the performance of their duties.  
Directors shall have no personal liability for corporate 
obligations of the authority or the methods of enforcement and 
collection thereof. 
    Subd. 3.  [ARTICLES OF INCORPORATION; BYLAWS.] Rural 
development financing authorities shall have no capital stock.  
Sections 143 to 152 shall constitute their articles of 
incorporation.  An authority may adopt bylaws consistent with 
sections 143 to 152. 
    Sec. 146.  [469.145] [FINANCING PROJECTS AND FACILITIES.] 
    An authority may provide funds for its purposes by the 
following methods: 
    (1) issuing bonds of the authority as authorized by section 
147, subdivision 1; and 
    (2) issuing notes of the authority as authorized by section 
147, subdivision 2.  
    Sec. 147.  [469.146] [ISSUANCE OF BONDS AND NOTES.] 
    Subdivision 1.  [BONDS.] For the purposes authorized in 
section 143, the authority may issue bonds and execute mortgages 
and contracts, pledge revenues, and enter into covenants and 
agreements for the security thereof in the same manner and 
subject to the same conditions as a municipality under the 
provisions of sections 153 to 166 except as otherwise and 
additionally provided in sections 143 to 152.  Net rentals and 
other charges payable to the authority by the operator or lessee 
of any project and pledged by the authority for payment of its 
bonds and interest thereon, and for the creation and maintenance 
of reserves therefor, may be reduced by amounts not exceeding 
the payments actually received by the authority from the other 
sources described in sections 143 to 152.  
    Subd. 2.  [NOTES.] The authority may issue notes, including 
renewal notes, for any purpose for which bonds may be issued, 
whenever the authority determines that payment thereof can be 
made in full from any revenues the authority expects to receive 
from any source.  The notes may be issued to provide funds to 
pay preliminary costs of surveys, plans, development, or other 
matters relating to any proposed or existing project.  The 
authority may pledge the revenues, subject to any other pledge 
thereof, for the payment of the notes, and may secure the notes 
in the same manner and with the same effect as herein provided 
for bonds and may also secure the notes by the personal 
guarantee of property owners within a benefited area.  The 
authority may make contracts for the future sale of the notes, 
by which the purchaser shall be committed to purchase the notes 
on terms and conditions stated in such contracts.  The authority 
may pay the consideration it deems proper for the commitments.  
    Sec. 148.  [469.147] [PROCESSING AGREEMENT.] 
    The authority may enter into agreements with owners of 
agricultural land, within or outside the state, providing for 
payment of charges for the use and availability of any project 
for processing products of the land, to pay part or all of the 
capital cost incurred by the authority.  The charges may be made 
payable in fixed amounts, or in installments with interest at an 
agreed rate, or in amounts proportionate to the volume of 
products processed, or in any combination of these ways.  The 
agreements may bind landowners to devote a specified acreage to 
production for processing by the project, or may bind the 
authority and the operator of the project to cause specified 
quantities to be processed, or both, for periods as may be 
agreed.  Charges payable by landowners to the authority under 
the agreements may be pledged by it to pay or guarantee the 
payment of its bonds, or may be used by the authority for the 
purposes stated in section 143.  
    Sec. 149.  [469.148] [APPLICATIONS FOR LOAN GUARANTIES.] 
    The authority, or a county exercising the powers of an 
authority pursuant to section 145, may undertake or participate 
in undertaking a project deemed to further the policies and 
purposes of the agricultural resource loan guaranty program 
established and described in sections 41A.01 to 41A.06, by 
applying to the agricultural resource loan guaranty board for a 
guaranty by the state of a portion of a loan for the project to 
be secured by the applicant, or by another eligible borrower. 
For this purpose it may do all acts required of an applicant or 
of a borrower under the provisions of sections 41A.01 to 41A.06, 
including the computation, segregation, and application of tax 
increments by deposit in the loan guaranty fund under the terms 
of the loan guaranty.  
    Sec. 150.  [469.149] [AGREEMENTS FOR RESERVATION OF TAX 
INCREMENTS.] 
    The authority may enter into an agreement with any county 
in which a project is to be situated, or a county exercising the 
powers of an authority may adopt a resolution, under which an 
agricultural resource project for which a conditional commitment 
for a loan guaranty has been made by the state as provided in 
section 41A.04, subdivision 3, is a tax increment financing 
project under sections 175 to 180 for so long as may be provided 
in the loan guaranty.  The tax increment from the agricultural 
resource project shall be remitted to the authority or to the 
county for deposit and use in the loan guaranty fund of the 
state as provided in sections 41A.01 to 41A.06.  Notwithstanding 
section 155, the tax increment for an agricultural resource 
project shall be discharged when either of the following 
occurs:  (a) the loan obligation has been satisfied; or (b) the 
amount in the project account equals the amount of the 
guaranteed portion of the outstanding principal and interest on 
the guaranteed loan.  Every county may, by resolution of the 
county board, do all things necessary for the computation, 
segregation, and application of tax increments under the loan 
guaranty in accordance with this section and sections 175 to 180.
    Sec. 151.  [469.150] [APPROVAL BY COMMISSIONER OF ENERGY 
AND ECONOMIC DEVELOPMENT.] 
    Any authority contemplating the exercise of the powers 
granted by sections 143 to 152 may apply to the commissioner of 
energy and economic development for information, advice, and 
assistance.  No authority shall undertake any project authorized 
in sections 143 to 152 until the commissioner has approved the 
project, on the basis of preliminary information the 
commissioner requires, as tending to further the purposes and 
policies of sections 143 to 152.  The commissioner may treat the 
preliminary information in a confidential manner, to the extent 
requested by the authority.  Approval under this section shall 
not be deemed to be an approval by the commissioner or the state 
of the feasibility of the project or the terms of the lease to 
be executed or the bonds to be issued therefor, and the 
commissioner shall so state in communicating the approval. 
    Sec. 152.  [469.151] [STATE AND COUNTY NOT LIABLE ON 
BONDS.] 
    The bonds and other obligations of an authority shall not 
be the debt of the state of Minnesota or of any county or 
political subdivision.  

                    MUNICIPAL INDUSTRIAL DEVELOPMENT 
    Sec. 153.  [469.152] [PURPOSES.] 
    The welfare of the state requires the active promotion, 
attraction, encouragement, and development of economically sound 
industry and commerce through governmental action for the 
purpose of preventing the emergence of blighted and marginal 
lands and areas of chronic unemployment.  It is the policy of 
the state to facilitate and encourage action by local government 
units to prevent the economic deterioration of such areas to the 
point where the process can be reversed only by total 
redevelopment through the use of local, state, and federal funds 
derived from taxation, necessitating relocating displaced 
persons and duplicating public services in other areas.  By the 
use of the powers and procedures described in sections 153 to 
166, local government units and their agencies and authorities 
responsible for redevelopment and economic development may 
prevent occurrence of conditions requiring redevelopment, or aid 
in the redevelopment of existing areas of blight, marginal land, 
and avoidance of substantial and persistent unemployment.  
    The welfare of the state further requires the provision of 
necessary health care facilities, so that adequate health care 
services are available to residents of the state at reasonable 
cost.  The welfare of the state further requires the provision 
of county jail facilities for the purpose of providing 
adequately for the care, control, and safeguarding of civil 
rights of prisoners.  The welfare of the state requires that, 
whenever feasible, employment opportunities made available in 
part by sections 153 to 166 or other state law providing for 
similar financing mechanisms should be offered to individuals 
who are unemployed or who are economically disadvantaged.  
    Sec. 154.  [469.153] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 153 to 166, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning.  
    Subd. 2.  [PROJECT.] (a) "Project" means (1) any 
properties, real or personal, used or useful in connection with 
a revenue producing enterprise, or any combination of two or 
more such enterprises engaged or to be engaged in generating, 
transmitting, or distributing electricity, assembling, 
fabricating, manufacturing, mixing, processing, storing, 
warehousing, or distributing any products of agriculture, 
forestry, mining, or manufacture, or in research and development 
activity in this field; (2) any properties, real or personal, 
used or useful in the abatement or control of noise, air or 
water pollution, or in the disposal of solid wastes, in 
connection with a revenue producing enterprise, or any 
combination of two or more such enterprises engaged or to be 
engaged in any business or industry; (3) any properties, real or 
personal, used or useful in connection with the business of 
telephonic communications, conducted or to be conducted by a 
telephone company, including toll lines, poles, cables, 
switching and other electronic equipment and administrative, 
data processing, garage and research and development facilities; 
(4) any properties, real or personal, used or useful in 
connection with a district heating system, consisting of the use 
of one or more energy conversion facilities to produce hot water 
or steam for distribution to homes and businesses, including 
cogeneration facilities, distribution lines, service facilities 
and retrofit facilities for modifying the user's heating or 
water system to use the heat energy converted from the steam or 
hot water.  
    (b) "Project" also includes any properties, real or 
personal, used or useful in connection with a revenue producing 
enterprise, or any combination of two or more such enterprises 
engaged in any business. 
     (c) "Project" also includes any properties, real or 
personal, used or useful for the promotion of tourism in the 
state.  Properties may include hotels, motels, lodges, resorts, 
recreational facilities of the type that may be acquired under 
section 471.191, and related facilities.  
    (d) "Project" also includes any properties, real or 
personal, used or useful in connection with a revenue producing 
enterprise, whether or not operated for profit, engaged in 
providing health care services, including hospitals, nursing 
homes, and related medical facilities. 
     (e) "Project" does not include any property to be sold or 
to be affixed to or consumed in the production of property for 
sale, and does not include any housing facility to be rented or 
used as a permanent residence.  
    (f) "Project" also means the activities of any revenue 
producing enterprise involving the construction, fabrication, 
sale or leasing of equipment or products to be used in 
gathering, processing, generating, transmitting or distributing 
solar, wind, geothermal, biomass, agricultural or forestry 
energy crops, or other alternative energy sources for use by any 
person or any residential, commercial, industrial or 
governmental entity in heating, cooling or otherwise providing 
energy for a facility owned or operated by that person or entity.
    (g) "Project" also includes any properties, real or 
personal, used or useful in connection with a county jail or 
county regional jail, the plans for which are approved by the 
commissioner of corrections; provided that the provisions of 
section 156, subdivisions 7 and 13, do not apply to those 
projects. 
    (h) "Project" also includes any real properties used or 
useful in furtherance of the purposes and policies of sections 
136 to 142. 
    (i) "Project" also includes related facilities as defined 
by section 471A.02, subdivision 11. 
    Subd. 2.  [MUNICIPALITY.] "Municipality" means any home 
rule charter or statutory city, any town described in section 
368.01, and any county if (1) the project is located outside the 
boundaries of a city or a town described in section 368.01 or 
(2) the project involves telephonic communications conducted by 
or to be conducted by a telephone company, or financial or other 
assistance to rail users as defined in section 222.48, 
subdivision 6, for the purpose of making capital investment 
loans for rail line rehabilitation.  
    Subd. 3.  [REDEVELOPMENT AGENCY.] "Redevelopment agency" 
means any port authority referred to in sections 49 to 69, or 
any city authorized by general or special law to exercise the 
powers of a port authority; any economic development authority 
referred to in sections 91 to 109; any housing and redevelopment 
authority referred to in sections 1 to 47 or any body authorized 
to exercise the powers of a housing and redevelopment authority; 
and any area or municipal redevelopment agency referred to in 
sections 110 to 124. 
    Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
commissioner of energy and economic development.  
    Subd. 5.  [DEPARTMENT.] "Department" means the department 
of energy and economic development.  
    Subd. 6.  [TELEPHONE COMPANY.] "Telephone company" means 
any person, firm, association, including a cooperative 
association formed pursuant to chapter 308, or corporation, 
excluding municipal telephone companies, operating for hire any 
telephone line, exchange or system, wholly or partly within this 
state. 
    Subd. 7.  [CONTRACTING PARTY.] "Contracting party" means a 
party to a revenue agreement other than the municipality or 
redevelopment agency. 
    Subd. 8.  [REVENUES.] "Revenues" of a project include 
payments under a revenue agreement, or under notes, debentures, 
bonds and other secured or unsecured debt obligations of a 
contracting party. 
    Subd. 9.  [REVENUE AGREEMENT.] "Revenue agreement" means 
any written agreement between a municipality or redevelopment 
agency and a contracting party with respect to a project, 
whereby the contracting party agrees to pay to the municipality 
or redevelopment agency or its order amounts sufficient at all 
times to pay when due the principal of, premium, if any, and 
interest on all bonds issued by the municipality or 
redevelopment agency with respect to that project.  A revenue 
agreement may be in the form of a lease, mortgage, direct or 
installment sale contract, loan agreement, take or pay or 
similar agreement, and be secured in manner the parties agree or 
be unsecured.  A revenue agreement must satisfy the requirements 
of section 156, subdivision 5. 
    Subd. 10.  [TRUSTEE.] "Trustee" means any corporation, bank 
or other entity authorized under any law of the United States or 
of any state to exercise trust powers, or any natural person, 
acting as trustee, co-trustee or successor trustee under an 
indenture pursuant to designation of the municipality or 
redevelopment agency. 
    Subd. 11.  [ALTERNATIVE ENERGY.] "Alternative energy" means 
any energy source which does not depend upon nuclear fuel or 
nonrenewable fossil fuel, or which makes available another 
energy source which currently is wasted and which includes, but 
is not limited to, cogeneration or district heating.  
    Sec. 155.  [469.154] [DUTIES OF DEPARTMENT OF ENERGY AND 
ECONOMIC DEVELOPMENT.] 
    Subdivision 1.  [GENERALLY.] The department of energy and 
economic development shall investigate, assist and advise 
municipalities, and report to the governor and the legislature 
concerning the operation of sections 153 to 166 and the projects 
undertaken under those sections. 
    Subd. 2.  [LOCAL REQUEST FOR ASSISTANCE.] Any municipality 
or redevelopment agency contemplating the exercise of the powers 
granted by sections 153 to 166 may apply to the commissioner for 
information, advice, and assistance.  The commissioner may 
handle such preliminary information in a confidential manner, to 
the extent requested by the municipality. 
    Subd. 3.  [CONDITIONS; APPROVAL.] No municipality or 
redevelopment agency shall undertake any project authorized by 
sections 153 to 166, except a project referred to in section 
154, subdivision 2, paragraph (g), unless its governing body 
finds that the project furthers the purposes stated in section 
153, nor until the commissioner has approved the project, on the 
basis of preliminary information the commissioner requires, as 
tending to further the purposes and policies of sections 153 to 
166.  The commissioner may not approve any projects relating to 
health care facilities except as permitted under subdivision 6.  
Approval shall not be deemed to be an approval by the 
commissioner 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. 
    Subd. 4.  [HEARING.] Prior to submitting an application to 
the department requesting approval of a project pursuant to 
subdivision 3, the governing body or a committee of the 
governing body of the municipality or redevelopment agency shall 
conduct a public hearing on the proposal to undertake and 
finance the project.  Notice of the time and place of hearing, 
and stating the general nature of the project and an estimate of 
the principal amount of bonds or other obligations to be issued 
to finance the project, shall be published at least once not 
less than 14 days nor more than 30 days prior to the date fixed 
for the hearing, in the official newspaper and a newspaper of 
general circulation of the municipality or redevelopment 
agency.  The notice shall state that a draft copy of the 
proposed application to the department, together with all 
attachments and exhibits, shall be available for public 
inspection following the publication of the notice and shall 
specify the place and times where and when it will be so 
available.  The governing body of the municipality or the 
redevelopment agency shall give all parties who appear at the 
hearing an opportunity to express their views with respect to 
the proposal to undertake and finance the project.  Following 
the completion of the public hearing, the governing body of the 
municipality or redevelopment agency shall adopt a resolution 
determining whether or not to proceed with the project and its 
financing; it may thereafter apply to the department for 
approval of the project. 
    Subd. 5.  [INFORMATION TO ENERGY AND ECONOMIC DEVELOPMENT 
AUTHORITY.] Each municipality and redevelopment agency upon 
entering into a revenue agreement, except one pertaining to a 
project referred to in section 154, subdivision 2, paragraph 
(g), shall furnish the energy and economic development authority 
on forms the authority prescribes the following information 
concerning the project:  The name of the contracting party, the 
nature of the enterprise, the location, approximate number of 
employees, the general terms and nature of the revenue 
agreement, the amount of bonds or notes issued, and other 
information the energy and economic development authority deems 
advisable.  The energy and economic development authority shall 
keep a record of the information which shall be available to the 
public at times the authority prescribes. 
    Subd. 6.  [HEALTH CARE FACILITIES.] The commissioner of 
energy and economic development shall forward to the 
commissioner of human services and the commissioner of health 
for review, all applications for projects relating to nursing 
homes licensed by the commissioner of health under chapter 
144A.  This review process does not apply to projects approved 
by the housing finance agency involving residences for the 
elderly, the costs of which will not be reimbursed under the 
medical assistance program.  The commissioner of human services 
and the commissioner of health must return the applications to 
the commissioner of energy and economic development with a 
recommendation within 30 days of receipt.  The commissioner of 
energy and economic development may not approve an application 
unless the project has been determined by both the commissioner 
of human services and the commissioner of health to be 
consistent with policies of the state as reflected in a statute 
or rule.  The following projects shall not be approved: 
    (1) projects that will result in an increase in the number 
of nursing home or boarding care beds in the state; 
    (2) projects involving refinancing, unless the refinancing 
will result in a reduction in debt service charges that will be 
reflected in charges to patients and third-party payors; and 
    (3) projects that are inconsistent with the established 
policies of the state as reflected in a statute or rule. 
    Subd. 7.  [EMPLOYMENT PREFERENCE.] Every municipality, 
redevelopment agency, or other person undertaking a project 
financed wholly or in part under sections 153 to 166 or by 
similar financing mechanisms is encouraged to target employment 
opportunities to qualified individuals who are unemployed or 
economically disadvantaged as defined in the federal Job 
Training Partnership Act of 1982, Statutes at Large, volume 96, 
page 1322.  The intent of this subdivision may be accomplished 
by mechanisms such as a first source agreement in which the 
employer agrees to use a designated employment office as a first 
source for employment recruitment, referral, and placement, and 
by other means. 
    Not later than July 1, 1987, every municipality, 
redevelopment agency, or other person who undertakes a project 
financed wholly or in part by these financing mechanisms shall 
submit an employment report to the energy and economic 
development authority.  The report shall be on forms provided by 
the energy and economic development authority and shall include, 
but need not be limited to, the following information:  
    (a) the total number of jobs created by the project, 
    (b) the number of unemployed and economically disadvantaged 
persons hired, and 
    (c) the average wage level of the jobs created.  
    Sec. 156.  [469.155] [POWERS.] 
    Subdivision 1.  [GENERAL.] Any municipality or 
redevelopment agency has the powers set forth in this section.  
    Subd. 2.  [PROJECT ACQUISITION.] It may acquire, construct, 
and hold any lands, buildings, easements, water and air rights, 
improvements to lands and buildings, and capital equipment to be 
located permanently or used exclusively on a designated site and 
solid waste disposal and pollution control equipment, and 
alternative energy equipment and inventory, regardless of where 
located, that are deemed necessary in connection with a project 
to be situated within the state, and construct, reconstruct, 
improve, better, and extend the project.  It may also pay part 
or all of the cost of an acquisition and construction by a 
contracting party under a revenue agreement.  
    Subd. 3.  [REVENUE BONDS.] It may issue revenue bonds, in 
anticipation of the collection of revenues of a project to be 
situated within the state, to finance, in whole or in part, the 
cost of the acquisition, construction, reconstruction, 
improvement, betterment, or extension thereof.  
    Subd. 4.  [REFINANCING HEALTH FACILITIES.] It may issue 
revenue bonds to pay, purchase, or discharge all or any part of 
the outstanding indebtedness of a contracting party engaged 
primarily in the operation of one or more nonprofit hospitals or 
nursing homes previously incurred in the acquisition or 
betterment of its existing hospital or nursing home facilities 
to the extent deemed necessary by the governing body of the 
municipality or redevelopment agency; this may include any 
unpaid interest on the indebtedness accrued or to accrue to the 
date on which the indebtedness is finally paid, and any premium 
the governing body of the municipality or redevelopment agency 
determines to be necessary to be paid to pay, purchase, or 
defease the outstanding indebtedness.  If revenue bonds are 
issued for this purpose, the refinancing and the existing 
properties of the contracting party shall be deemed to 
constitute a project under section 154, subdivision 2, clause 
(d).  Revenue bonds may not be issued pursuant to this 
subdivision unless the application for approval of the project 
pursuant to section 155 shows that a reduction in debt service 
charges is estimated to result and will be reflected in charges 
to patients and third party payors.  Proceeds of revenue bonds 
issued pursuant to this subdivision may not be used for any 
purpose inconsistent with the provisions of chapter 256B.  
Nothing in this subdivision prohibits the use of revenue bond 
proceeds to pay outstanding indebtedness of a contracting party 
to the extent permitted by law on March 28, 1978.  
    Subd. 5.  [REVENUE AGREEMENTS.] It may enter into a revenue 
agreement with any person, firm, or public or private 
corporation or federal or state governmental subdivision or 
agency so that payments required thereby to be made by the 
contracting party are fixed and revised as necessary to produce 
income and revenue sufficient to provide for the prompt payment 
of principal of and interest on all bonds issued hereunder when 
due.  The revenue agreement must also provide that the 
contracting party is required to pay all expenses of the 
operation and maintenance of the project including adequate 
insurance thereon and insurance against all liability for injury 
to persons or property arising from its operation, and all taxes 
and special assessments levied upon or with respect to the 
project and payable during the term of the revenue agreement.  
During the term of the revenue agreement, except as provided in 
subdivision 17, a tax shall be imposed and collected upon the 
project or, pursuant to the provisions of section 272.01, 
subdivision 2, for the privilege of using and possessing the 
project, in the same amount and to the same extent as though the 
contracting party were the owner of all real and personal 
property comprising the project.  
    Subd. 6.  [PLEDGE OF REVENUES.] It may pledge and assign to 
the holders of the bonds or a trustee therefor all or any part 
of the revenues of one or more projects and define and segregate 
the revenues or provide for the payment thereof to a trustee, 
whether or not the trustee is in possession of the project under 
a mortgage or otherwise.  
    Subd. 7.  [SECURITY INTERESTS.] It may mortgage or 
otherwise encumber or grant a security interest in any project 
and its revenues, or may permit a mortgage, encumbrance, or 
security interest to be granted by a contracting party to the 
revenue agreement, in favor of the municipality or redevelopment 
agency, the holders of the bonds, or a trustee therefor.  In 
creating a mortgage, encumbrance, or security interest, a 
municipality or redevelopment agency shall not obligate itself 
except with respect to the project and its revenues, unless 
otherwise specifically provided by law. 
    Subd. 8.  [IMPLEMENTATION OF POWERS AND COVENANTS; 
CONSTRUCTION AND ACQUISITION BY CONTRACTING PARTY.] It may make 
all contracts, execute all instruments, and do all things 
necessary or convenient in the exercise of the powers granted in 
sections 153 to 166, or in the performance of its covenants or 
duties, or in order to secure the payment of its bonds.  It may 
enter into a revenue agreement authorizing the contracting 
party, subject to any terms and conditions the municipality or 
redevelopment agency finds necessary or desirable and proper, to 
provide for the construction, acquisition, and installation of 
the buildings, improvements, and equipment to be included in the 
project by any means legally available to the contracting party 
and in the manner determined by the contracting party and 
without advertisement for bids unless advertisement by the 
contracting party is otherwise required by law.  
    Subd. 9.  [INTERGOVERNMENTAL AGREEMENTS.] It may enter into 
and perform contracts and agreements with other municipalities, 
political subdivisions, and state agencies, authorities, and 
institutions as the governing body of the municipality or 
redevelopment agency may deem proper and feasible for or 
concerning the planning, construction, lease, purchase, 
mortgaging or other acquisition, and the financing of a project, 
and the maintenance thereof, including an agreement whereby one 
municipality issues its revenue bonds in behalf of one or more 
other municipalities pursuant to revenue agreements with the 
same or different contracting parties, which contracts and 
agreements may establish a board, commission, or other body 
deemed proper for the supervision and general management of the 
facilities of the project.  However, no municipality or 
redevelopment agency may enter into or perform any contract or 
agreement with any school district under which the municipality 
or redevelopment agency issues its revenue bonds or otherwise 
provides for the construction of school facilities and the 
school leases or otherwise acquires these facilities.  
    Subd. 10.  [FEDERAL LOANS AND GRANTS.] It may accept from 
any authorized agency of the federal government loans or grants 
for the planning, construction, acquisition, leasing, purchase, 
or other provision of any project, and enter into agreements 
with the agency respecting the loans or grants.  
    Subd. 11.  [CONVEYANCE OF PROJECTS.] It may sell and convey 
all properties acquired in connection with projects, including 
the sale and conveyance thereof subject to a mortgage, or the 
sale and conveyance thereof under an option granted to the 
lessee of the project, for the price, and at the time the 
governing body of the municipality or redevelopment agency 
determines.  No sale or conveyance of the properties may be made 
in a manner that impairs the rights or interests of the holders 
of any bonds issued under the authority of sections 153 to 166.  
    Subd. 12.  [REFUNDING.] It may issue revenue bonds to 
refund, in whole or in part, bonds previously issued by the 
municipality or redevelopment agency under authority of sections 
153 to 166, and interest on them.  
    Subd. 13.  [TERMINATION OF REVENUE AGREEMENT.] If so 
provided in the revenue agreement, it may terminate the 
agreement and re-enter or repossess the project upon the default 
of the contracting party, and operate, lease, or sell the 
project in the manner authorized or required by the provisions 
of the revenue agreement or of the resolution or indenture 
securing the bonds issued for the project.  Any revenue 
agreement which includes provision for a conveyance of real 
estate to the contracting party may be terminated in accordance 
with the revenue agreement, notwithstanding that the revenue 
agreement may constitute an equitable mortgage.  
    Subd. 14.  [LIMITATIONS ON POWERS.] It may not operate any 
project referred to in sections 153 to 166 as a business or in 
any manner, except as authorized in subdivision 13.  Nothing in 
this section authorizes any municipality or redevelopment agency 
to expend any funds on any project, other than the revenues of 
the project, or the proceeds of revenue bonds and notes issued 
hereunder, or other funds granted to the municipality or 
redevelopment agency for the purposes of sections 153 to 166, 
except:  
    (1) as is otherwise permitted by law;  
    (2) to enforce any right or remedy under any revenue 
agreement or related agreement for the benefit of the 
bondholders or for the protection of any security given in 
connection with a revenue agreement; or 
    (3) to pay without reimbursement part or all of the public 
cost of redevelopment of land including the acquisition of the 
site of the project, which cost shall not be deemed part of the 
cost of the project.  
    Subd. 15.  [INVESTMENT AND DEPOSIT OF FUNDS.] It may invest 
or deposit, or authorize a trustee to invest or deposit, any 
proceeds of revenue bonds or notes issued pursuant to sections 
153 to 166, and income from the investment of the proceeds, in 
any manner and upon any terms and conditions agreed to by the 
contracting party under the related revenue agreement, 
resolution, or indenture, notwithstanding chapter 118 or section 
471.56 or 475.56, but subject to any statutory provisions which 
govern the deposit and investment of funds of a contracting 
party which is itself a governmental subdivision or agency.  
    Subd. 16.  [CONTRACTOR'S BOND AND MECHANICS' LIENS.] It may 
waive or require the furnishing of a contractor's payment and 
performance bond of the kind described in section 574.26, 
whether or not the municipality or redevelopment agency is a 
party to the construction contract.  If the bond is required, 
the provisions of chapter 514 relating to liens for labor and 
materials are not applicable with respect to work done or labor 
or materials supplied for the project.  If the bond is waived, 
the provisions of chapter 514 apply with respect to work done or 
labor or materials supplied for the project.  
    Subd. 17.  [TAX EXEMPTION FOR UNFINISHED SALE OR RENTAL 
PROJECTS.] If a building is to be constructed for sale or rent 
to a contracting party, the building is exempt from taxation as 
public property exclusively used for a public purpose until the 
building is first conveyed or first occupied by the lessee, in 
whole or in part, whichever occurs first, for up to a maximum of 
four years from the date of issue of bonds or notes for the 
project.  The exemption must be applied for before October 10 of 
the year of the levy of the first taxes to which the exemption 
applies.  
    Sec. 157.  [469.156] [AUTHORIZATION OF PROJECTS AND BONDS.] 
    The acquisition, construction, reconstruction, improvement, 
betterment, or extension of any project, the execution of any 
revenue agreement or mortgage pertaining thereto, and the 
issuance of bonds in anticipation of the collection of the 
revenues of the project to provide funds to pay for its cost, 
may be authorized by an ordinance or resolution of the governing 
body adopted at a regular or duly called special meeting thereof 
by the affirmative vote of a majority of its members.  No 
election shall be required to authorize the use of any of the 
powers conferred by sections 153 to 166.  No lease of any 
project shall be subject to the provisions of section 504.02, 
unless expressly so provided in the lease.  
    Sec. 158.  [469.157] [DETERMINATION OF COST OF PROJECT.] 
    In determining the cost of a project, the governing body 
may include all cost and estimated cost of the acquisition, 
construction, reconstruction, improvement, betterment, and 
extension of the project, all engineering, inspection, fiscal, 
legal, administrative, and printing expense, the interest which 
it is estimated will accrue during the construction period and 
for six months thereafter on money borrowed or which it is 
estimated will be borrowed pursuant to sections 153 to 166, and 
bond reserves and premiums for insurance of lease rentals 
pledged to pay the bonds.  
    Sec. 159.  [469.158] [MANNER OF ISSUANCE OF BONDS; INTEREST 
RATE.] 
    Bonds authorized under sections 153 to 166 must be issued 
in accordance with the provisions of chapter 475 relating to 
bonds payable from income of revenue producing conveniences, 
except that public sale is not required, and the bonds may 
mature at the time or times, in the amount or amounts, within 30 
years from date of issue, and may be sold at a price equal to 
the percentage of the par value thereof, plus accrued interest, 
and bearing interest at the rate or rates agreed by the 
contracting party, the purchaser, and the municipality or 
redevelopment agency, notwithstanding any limitation of interest 
rate or cost or of the amounts of annual maturities contained in 
any other law.  Bonds issued to refund bonds previously issued 
pursuant to sections 153 to 166 may be issued in amounts 
determined by the municipality or redevelopment agency 
notwithstanding the provisions of section 475.67, subdivision 3. 
    Sec. 160.  [469.159] [TEMPORARY LOANS.] 
    After authorization of bonds pursuant to section 157, the 
governing body may provide funds immediately required for the 
purpose and not exceeding the amount of the bonds, by effecting 
temporary loans upon the terms it determines by resolution.  The 
loans shall be evidenced by notes subject to the provisions of 
section 163, due in not exceeding 24 months from the date 
thereof, payable to the order of the lender or to bearer, to be 
repaid with interest from the proceeds of the bonds when issued 
and delivered to the purchaser.  The temporary loans may be made 
without any public advertisement.  
    Sec. 161.  [469.160] [VALIDITY OF BONDS; PRESUMPTION.] 
    The validity of bonds or notes issued under sections 153 to 
166 shall not depend on nor be affected by the validity or 
regularity of any proceedings relating to the acquisition, 
purchase, construction, reconstruction, improvement, betterment, 
or extension of the project for which they are issued.  The 
ordinance or resolution authorizing the bonds or notes may 
provide that the bonds or notes shall contain a recital that 
they are issued pursuant to sections 153 to 166, and the recital 
shall be conclusive evidence of their validity and of the 
regularity of their issuance.  
    Sec. 162.  [469.161] [LIMITATION OF POWERS BY RESOLUTION OR 
ORDINANCE.] 
    Any ordinance, resolution, revenue agreement, indenture or 
other instrument authorizing the issuance of bonds under 
sections 153 to 166 to finance, in whole or in part, the 
acquisition, construction, reconstruction, improvement, 
betterment, or extension of any project may contain covenants, 
notwithstanding that the covenants may limit the exercise of 
powers conferred by sections 153 to 166 as to: 
    (1) the rents or installment payments to be charged for the 
use or purchase of properties acquired, constructed, 
reconstructed, improved, bettered, or extended under the 
authority of sections 153 to 166; 
    (2) the use and disposition of the revenues of the projects;
    (3) the creation and maintenance of sinking funds and the 
regulation, use, and disposition thereof; 
    (4) the creation and maintenance of funds to provide for 
maintaining the project and replacement of properties 
depreciated, damaged, destroyed, or condemned; 
    (5) the purpose, or purposes, to which the proceeds of sale 
of bonds may be applied and the use and disposition of the 
proceeds; 
    (6) the nature of mortgages or other encumbrances on the 
project; 
    (7) the events of default and the rights and liabilities 
arising thereon and the terms and conditions upon which the 
holders of bonds may bring any suit or action on the bonds or on 
any coupons appurtenant to them; 
    (8) the issuance of other or additional bonds or 
instruments payable from or constituting a charge against the 
revenue of the project; 
    (9) the insurance to be carried upon the project and the 
use and disposition of insurance moneys; 
    (10) the keeping of books of account and the inspection and 
audit thereof; 
    (11) the terms and conditions upon which any or all of the 
bonds shall become or may be declared due before maturity and 
the terms and conditions upon which the declaration and its 
consequences may be waived; 
    (12) the rights, liabilities, powers, and duties arising 
upon the breach by the municipality or redevelopment agency of 
any covenants, conditions, or obligations; 
    (13) the vesting in a trustee or trustees of the right to 
enforce any covenants made to secure or to pay the bonds; the 
powers and duties of the trustee or trustees, and the limitation 
of his or its liabilities; 
    (14) the terms and conditions upon which the holder or 
holders of the bonds, or the holders of any proportion or 
percentage of them, may enforce any covenants made under 
sections 153 to 166 or any duties imposed thereby; 
    (15) a procedure by which the terms of any ordinance or 
resolution authorizing bonds or of any other contract with 
bondholders, including an indenture of trust or similar 
instrument, may be amended or abrogated, and the amount of bonds 
the holders of which must consent thereto, and the manner in 
which the consent may be given; and 
    (16) the subordination of the security of any bonds issued 
under sections 153 to 166 and the payment of principal and 
interest thereof, to the extent deemed feasible and desirable by 
the governing body, to other bonds or obligations of the 
municipality or redevelopment agency issued to finance the 
project or that may be outstanding when the bonds thus 
subordinated are issued and delivered.  
    Sec. 163.  [469.162] [SOURCE OF PAYMENT FOR BONDS.] 
    Subdivision 1.  [RESTRICTIONS ON PAYMENT.] Revenue bonds 
issued under sections 153 to 166 shall not be payable from nor 
charged upon any funds other than the revenue pledged to their 
payment, except as provided in this section, nor shall the 
municipality or redevelopment agency issuing the same be subject 
to any liability on them.  No holder of the bonds shall ever 
have the right to compel any exercise of the taxing power of the 
municipality or redevelopment agency to pay the bonds or the 
interest thereon, except as provided in subdivision 2, nor to 
enforce payment of them against any property of the municipality 
or redevelopment agency except those projects, or portions 
thereof, mortgaged or otherwise encumbered under the provisions 
and for the purpose of sections 153 to 166.  
    Subd. 2.  [TAX INCREMENTS; PRE-1979 PROJECTS.] (a) Any 
municipality or redevelopment agency may request the county 
auditor of the county in which a project is situated to certify 
the original taxable value of the real property included therein 
and the tax increments realized each year after the commencement 
of the project, as defined in section 42, and shall be entitled 
to receive, use, and pledge the tax increments for the further 
security of the revenue bonds issued to finance the project, in 
either of the following ways:  
    (1) to pay premiums for insurance guaranteeing the payment 
of net rentals when due under the project lease; or 
    (2) to accumulate and maintain a reserve securing the 
payment when due of the principal of and interest on the bonds.  
    (b) Tax increments with respect to any industrial 
development project shall be segregated and specially accounted 
for by the county treasurer until all bonds issued to finance 
the project have been fully paid; but the county treasurer shall 
remit the same to the municipality or redevelopment agency only 
in the amount certified to him to be required for any of the 
purposes stated in paragraph (a).  The amount so needed shall be 
certified annually to the county auditor and treasurer by the 
municipality or redevelopment agency on or before October 1.  
Any tax increment remaining in any year after the remittance 
shall, when collected, be distributed among all of the taxing 
districts levying taxes on the project area, in proportion to 
the amounts levied by them.  This subdivision shall not apply to 
a project, certification of which is requested subsequent to 
August 1, 1979. 
    Subd. 3.  [RESTRICTIONS ON SECURITY.] Bonds issued under 
sections 153 to 166 shall not constitute a charge, lien, or 
encumbrance, legal or equitable, upon any property of the 
municipality or redevelopment agency, except those projects, or 
portions thereof, mortgaged or otherwise encumbered under the 
provisions and for the purposes of sections 153 to 166.  Each 
bond issued under sections 153 to 166 shall recite in substance 
that the bond, including interest thereon, is payable solely 
from the revenue pledged to its payment, but may contain a 
reference to the lease insurance or bond reserve for which the 
tax increment is pledged and appropriated.  No such bond shall 
constitute a debt of the municipality or redevelopment agency 
within the meaning of any constitutional or statutory 
limitation.  However, nothing herein shall impair the rights of 
holders of bonds issued hereunder to enforce covenants made for 
the security thereof as provided in section 164.  
    Sec. 164.  [469.163] [BONDHOLDERS' RIGHTS AND REMEDIES.] 
    Subject to any contractual limitations binding upon the 
holders of any issue of revenue bonds, or a trustee therefor, 
including the restriction of the exercise of any remedy to a 
specified proportion or percentage of the holders, any holder of 
bonds, or any trustee therefor, for the equal benefit and 
protection of all bondholders similarly situated, may: 
    (1) by suit, action, or proceeding at law or in equity, 
enforce his or its rights against the municipality or 
redevelopment agency and its governing body and any of its 
officers, agents, and employees, and may require and compel the 
municipality, redevelopment agency, or governing body, or any 
officers, agents, or employees to perform and carry out its and 
their duties and obligations under sections 153 to 166 and its 
and their covenants and agreements with bondholders; 
    (2) by action require the municipality or redevelopment 
agency and the governing body thereof to account as if they were 
the trustees of an express trust; 
    (3) by action enjoin any acts or things which may be 
unlawful or in violation of the rights of the bondholders; 
    (4) bring suit upon the bonds; 
    (5) foreclose any mortgage or lien given under the 
authority of sections 153 to 166, and cause the property 
standing as security to be sold under any proceedings permitted 
by law or equity; and 
    (6) exercise any right or remedy conferred by sections 153 
to 166 without exhausting and without regard to any other right 
or remedy conferred by sections 153 to 166 or any other law of 
this state.  None of these rights and remedies is intended to be 
exclusive of any other, and each is in addition to every other 
right and remedy.  
    Sec. 165.  [469.164] [POWERS ADDITIONAL TO APPLICATION OF 
EXISTING LAWS AND RULES.] 
    Subdivision 1.  [GENERALLY.] The powers conferred by 
sections 153 to 166 are in addition to the powers conferred by 
any other law or charter.  Insofar as the provisions of any 
other law or charter are inconsistent with sections 153 to 166, 
the provisions of these sections shall be controlling as to 
projects instituted under these sections.  Section 334.01 shall 
not apply to any interest rate charged or attributable to any 
obligation of a contracting party or sublessee or subtenant of a 
contracting party in connection with any project for which the 
proceedings are conducted, wholly or partly, pursuant to 
sections 153 to 166.  
    Subd. 2.  [TELEPHONE COMPANY PROJECTS.] In all cases in 
which a project involves telephonic communications conducted by 
or to be conducted by a telephone company, all laws of the 
state, and rules of the department of public service, that apply 
to property owned by a telephone company including laws and 
regulations relating to taxation and valuation of telephone 
company property, shall similarly apply to any real and personal 
property acquired, in whole or in part, by the issuance of bonds 
as authorized herein.  In the issuance of any bonds pursuant to 
sections 153 to 166, these sections shall control, 
notwithstanding the provisions of chapter 452, or any other 
general or special law relating to municipal or town telephone 
companies.  
    Sec. 166.  [469.165] [APPLICABILITY OF HOUSING AND 
REDEVELOPMENT AUTHORITY PROVISIONS.] 
    If property that has been acquired by a housing and 
redevelopment authority pursuant to the provisions of sections 1 
to 47, is sold, leased or acquired with the consent of the 
housing and redevelopment authority in connection with a project 
conducted wholly or partly pursuant to the provisions of 
sections 153 to 165, it shall be deemed to be devoted to public 
purposes and public uses and to conform to the project area 
redevelopment plan within the meaning of sections 1 to 47.  In 
giving its consent, the housing and redevelopment authority may 
waive any or all of the terms, conditions, restrictions and 
limitations imposed upon the property by section 29, and the 
purchaser of the property or any subsequent purchasers may 
convey the property without the consent of any housing and 
redevelopment authority and, to the extent of the waiver, free 
and clear of the terms, conditions, restrictions and 
limitations, whether or not the purchaser has obligated himself 
as provided in section 29, subdivision 5.  

                           ENTERPRISE ZONES  
    Sec. 167.  [469.166] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 167 to 174, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning.  
    Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
commissioner of energy and economic development.  
    Subd. 3.  [ENTERPRISE ZONE.] "Enterprise zone" means an 
area in the state designated as such by the commissioner. 
    Subd. 4.  [CITY.] "City" means a home rule charter or 
statutory city.  
    Subd. 5.  [MUNICIPALITY.] "Municipality" means a city, or a 
county for an area located outside the boundaries of a city.  If 
an area lies in two or more cities or in both incorporated and 
unincorporated areas, "municipality" shall include an entity 
formed pursuant to section 471.59 by the governing bodies of the 
cities with jurisdiction over the incorporated area and the 
counties with jurisdiction over the unincorporated area.  
    Subd. 6.  [GOVERNING BODY.] "Governing body" means the 
county board in the case of a county, the city council or other 
body designated by its charter in the case of a city, or the 
tribal or federal agency recognized as the governing body of an 
Indian reservation by the United States secretary of the 
interior.  
    Subd. 7.  [HUD.] "HUD" means the United States secretary of 
housing and urban development or the secretary's delegate or 
successor.  
    Subd. 8.  [INDIAN RESERVATION.] "Indian reservation" means 
an area determined to be such by the United States secretary of 
the interior.  
    Subd. 9.  [SMSA.] "SMSA" means the area in and around a 
city of 50,000 inhabitants or more, or an equivalent area, as 
defined by the United States Secretary of Commerce. 
    Subd. 10.  [EMPLOYMENT PROPERTY.] (a) "Employment property" 
means taxable property, excluding land but including buildings, 
structures, fixtures, and improvements that satisfy each of the 
following conditions:  
    (1) the property is located within an enterprise zone 
designated according to section 168.  
    (2) the property is commercial or industrial property 
except a facility the primary purpose of which is one of the 
following:  retail food and beverage services, automobile sales 
or service, or the provision of recreation or entertainment, or 
a private or commercial golf course, country club, massage 
parlor, tennis club, skating facility including roller skating, 
skateboard, and ice skating, racquet sports facility, including 
any handball or racquetball court, hot tub facility, suntan 
facility, or racetrack, or property of a public utility.  
    (b) In the case of property located in a border city zone, 
"employment property" includes land except in the case of 
employment property that is assessed pursuant to the first 
clause of the first sentence of section 273.13, subdivision 24, 
paragraph (b). 
    Subd. 11.  [MARKET VALUE.] "Market value" of a parcel of 
employment property means the value of the taxable property as 
annually determined pursuant to section 273.12, less (i) the 
market value of all property existing at the time of application 
for classification, as last assessed prior to the time of 
application, and (ii) any increase in the market value of the 
property referred to in clause (i) as assessed in each year 
after the employment property is first placed in service.  In 
each year, any change in the values of the employment property 
and the other property on the land shall be deemed to be 
proportionate unless caused by a capital improvement or loss.  
    Subd. 12.  [LEGISLATIVE ADVISORY COMMISSION.] "Legislative 
advisory commission" means the legislative advisory commission 
established under section 3.30.  
    Sec. 168.  [469.167] [DESIGNATION OF ENTERPRISE ZONES.] 
    Subdivision 1.  [PROCESS.] The commissioner shall designate 
an area as an enterprise zone if (a) an application is made in 
the form and manner and containing the information as prescribed 
by the commissioner; (b) the application is made by the 
governing body of the area; (c) the area is determined by the 
commissioner to be eligible for designation under section 169; 
and (d) the zone is selected pursuant to the process provided by 
section 170. 
    Subd. 2.  [DURATION.] The designation of an area as an 
enterprise zone shall be effective for seven years after the 
date of designation. 
    Subd. 3.  [LIMITATION.] No area may be designated as an 
enterprise zone after December 31, 1986.  No area may be 
designated as a border city zone after December 31, 1983. 
    Sec. 169.  [469.168] [ELIGIBILITY REQUIREMENTS.] 
    Subdivision 1.  [GENERALLY.] An area is eligible for 
designation if each of the requirements set forth in 
subdivisions 2 to 4 are met.  
    Subd. 2.  [BOUNDARIES; VACANT LAND.] The boundary of the 
zone or each subdivision of the zone must be continuous and the 
area must include vacant or underutilized lands or buildings.  
    Subd. 3.  [ACREAGE; MARKET VALUE.] The area of the zone 
must be less than 400 acres.  The total market value of the 
taxable property contained in the zone at the time of 
application must be less than $100,000 per acre or $300,000 per 
acre for an area located wholly within a first class city.  A 
zone which is located in a city of the third or fourth class may 
be divided into two to four separate subdivisions which need not 
be contiguous with each other.  Each subdivision must contain 
not less than 100 acres.  The restrictions provided by this 
paragraph shall not apply to areas designated pursuant to 
subdivision 4, paragraph (b) or (c). 
    Subd. 4.  [AREA CHARACTERISTICS.] The area must meet the 
requirements of paragraphs (a), (b), or (c).  
    (a) The proposed zone is located within an economic 
hardship area, as established by meeting two or more of the 
following criteria:  
    (1) the percentage of residential housing units within the 
area which are substandard is 15 percent or greater under 
criteria prescribed by the commissioner using data collected by 
the bureau of the census or data submitted by the municipality 
and approved by the commissioner;  
    (2) the percentage of households within the area that fall 
below the poverty level, as determined by the United States 
Census Bureau, is 20 percent or greater;  
    (3) (i) the total market value of commercial and industrial 
property in the area has declined over three of the preceding 
five years, or (ii) the total market value of all property in 
the area has declined or has increased less than 10.5 percent 
over the preceding three-year period;  
    (4) for the last full year for which data is available, the 
per capita income in the area was 90 percent or less of the per 
capita income for the state, excluding standard metropolitan 
statistical areas, or for the standard metropolitan statistical 
area if the area is located in a standard metropolitan 
statistical area;  
    (5) (i) the current rate of unemployment in the area is at 
least 120 percent of the statewide average unemployment for the 
last 12-month period for which verifiable figures are available, 
or (ii) the total number of employment positions has declined by 
at least ten percent during the last 18 months.  
    For purposes of this paragraph, an economic hardship area 
must have a population under the most recent federal decennial 
census of at least (1) 4,000 if any of the area is located 
wholly or partly within a standard metropolitan statistical 
area, or (2) 2,500 for an area located outside of a standard 
metropolitan statistical area; except that (1) no minimum 
population is required in the case of an area located in an 
Indian reservation, and (2) in the case of two or more cities 
seeking designation of an enterprise zone under a joint exercise 
of power pursuant to section 471.59, the minimum population 
required by this provision shall not exceed the sum of the 
populations of those cities.  A zone qualifying under this 
paragraph is referred to in sections 167 to 174 as a "hardship 
area zone."  
    (b) the area is so designated under federal legislation 
providing for federal tax benefits to investors, employers or 
employees in enterprise zones.  A zone qualifying under this 
paragraph is referred to in sections 167 to 174 as a "federally 
designated zone."  
    (c) the area consists of a statutory or home rule charter 
city with a contiguous border with a city in another state or 
with a contiguous border with a city in Minnesota which has a 
contiguous border with a city in another state and the area is 
determined by the commissioner to be economically or fiscally 
distressed.  An area designated under this paragraph is referred 
to in sections 167 to 174 as a "border city zone."  
    Sec. 170.  [469.169] [SELECTION OF ENTERPRISE ZONES.] 
    Subdivision 1.  [SUBMISSION OF APPLICATIONS.] By August 31 
of each year, a municipality seeking designation of an area as 
an enterprise zone shall submit an application to the 
commissioner.  The commissioner shall establish procedures and 
forms for the submission of applications for enterprise zone 
designation.  
    Subd. 2.  [APPLICATIONS; CONTENTS.] The applications for 
designation as an enterprise zone shall contain, at a minimum:  
    (1) verification that the area is eligible for designation 
pursuant to section 169;  
    (2) a development plan, outlining the types of investment 
and development within the zone that the municipality expects to 
take place if the incentives and tax reductions specified under 
clauses (4) and (5) are provided, the specific investment or 
development reasonably expected to take place, any commitments 
obtained from businesses, the projected number of jobs that will 
be created, the anticipated wage level of those jobs, and any 
proposed targeting of the jobs created, including affirmative 
action plans if any.  This clause does not apply to an 
application for designation as a border city zone;  
    (3) the municipality's proposed means of assessing the 
effectiveness of the development plan or other programs to be 
implemented within the zone once they have been implemented;  
    (4) the specific form of tax reductions, authorized by 
section 172, subdivision 1, proposed to be granted to 
businesses, the duration of the tax reductions, an estimate of 
the total state taxes likely to be foregone as a result, and a 
statement of the relationship between the proposed tax 
reductions and the type of investment or development sought or 
expected to be attracted to or maintained in the area if it is 
designated as a zone;  
    (5) the municipality's contribution to the zone as required 
by subdivision 5;  
    (6) any additional information required by the 
commissioner; and 
    (7) any additional information that the municipality 
considers relevant to the designation of the area as an 
enterprise zone.  
    Subd. 3.  [EVALUATION OF APPLICATIONS.] The commissioner 
shall review and evaluate the applications submitted pursuant to 
subdivision 2 and shall determine whether each area is eligible 
for designation as an enterprise zone.  In determining whether 
an area is eligible under section 169, subdivision 4, paragraph 
(a), if unemployment, employment, income or other necessary data 
are not available for the area from the federal departments of 
labor or commerce or the state demographer, the commissioner may 
rely upon other data submitted by the municipality if the 
commissioner determines it is statistically reliable or 
accurate.  The commissioner, together with the commissioner of 
revenue, shall prepare an estimate of the amount of state tax 
revenue which will be foregone for each application if the area 
is designated as a zone.  
     By October 1 of each year, the commissioner shall submit to 
the legislative advisory commission a list of the areas eligible 
for designation as enterprise zones, along with recommendations 
for designation and supporting documentation.  In making 
recommendations for designation, the commissioner shall consider 
and evaluate the applications pursuant to the following criteria:
    (1) the pervasiveness of poverty, unemployment, and general 
distress in the area; 
    (2) the extent of chronic abandonment, deterioration or 
reduction in value of commercial, industrial or residential 
structures in the area and the extent of property tax arrearages 
in the area; 
    (3) the prospects for new investment and economic 
development in the area with the tax reductions proposed in the 
application relative to the state and local tax revenue which 
would be foregone;  
    (4) the competing needs of other areas of the state;  
    (5) the municipality's proposed use of other state and 
federal development funds or programs to increase the 
probability of new investment and development occurring;  
    (6) the extent to which the projected development in the 
zone will provide employment to residents of the economic 
hardship area, and particularly individuals who are unemployed 
or who are economically disadvantaged as defined in the federal 
Job Training Partnership Act of 1982, 96 Statutes at Large 1322; 
    (7) the funds available pursuant to subdivision 7; and 
    (8) other relevant factors that the commissioner specifies 
in his recommendations.  
    The commissioner shall submit a separate list of the areas 
entitled to designation as federally designated zones and border 
city zones along with recommendations for the amount of funds to 
be allocated to each area.  
    Subd. 4.  [LAC RECOMMENDATIONS.] By October 15, the 
legislative advisory commission shall submit to the commissioner 
its advisory recommendations regarding the designation of 
enterprise zones.  By October 30 of each year the commissioner 
shall make the final designation of the areas as enterprise 
zones, pursuant to section 168, subdivision 1.  In making the 
designation, the commissioner may make modifications in the 
design of or limitations on the tax reductions contained in the 
application necessary because of the funding limitations under 
subdivision 7.  
    Subd. 5.  [LOCAL CONTRIBUTION.] No area may be designated 
as an enterprise zone unless the municipality agrees to make a 
qualifying local contribution in the form of a property tax 
reduction for employment property as provided by section 171 for 
any business qualifying for a state tax reduction pursuant to 
this section.  A qualifying local contribution may in the 
alternative be a local contribution or investment out of other 
municipal funds, but excluding any special federal grants or 
loans, equivalent to the property tax reduction.  In concluding 
the agreement with the municipality the commissioner may require 
that the local contribution will be made in a specified ratio to 
the amount of the state credits authorized.  If the local 
contribution is to be used to fund additional reductions in 
state taxes, the commissioner and the governing body of the 
municipality shall enter an agreement for timely payment to the 
state to reimburse the state for the amount of tax revenue 
foregone as a result.  The qualifying local contribution for 
development within the portion of an enterprise zone that is 
located in a town that has been added by boundary amendment to 
an enterprise zone that is located within five municipalities 
and was designated in 1984 shall be provided by the town. 
    Subd. 6.  [LIMITATIONS; NUMBER OF DESIGNATIONS.] (a) In 
each of the years 1983 and 1984, the commissioner shall 
designate at least two but not more than five areas as 
enterprise zones.  No designations shall be made after December 
31, 1984.  
    (b) No more than one area may be designated as an 
enterprise zone in any county, except that two areas may be 
designated in a county containing a city of the first class.  
    (c) No more than two areas in a congressional district may 
be designated as an enterprise zone in 1984.  
    This subdivision shall not apply to federally designated 
zones or border city zones.  
    Subd. 7.  [FUNDING LIMITATIONS.] The maximum amount of the 
tax reductions which may be authorized pursuant to designations 
of enterprise zones is $36,400,000.  The maximum amount of this 
total that may be authorized by the commissioner for tax 
reductions pursuant to section 172, subdivision 1, that will 
reduce tax revenues which otherwise would have been received 
during fiscal years 1984 and 1985 is $9,000,000.  Of the total 
limitation and the 1984-1985 biennial limitation the 
commissioner shall allocate to border city zones an amount equal 
to $16,610,940 and $5,000,000 respectively.  These funds shall 
be allocated among such zones on a per capita basis except that 
the maximum allocation to any one city is $6,610,940 and no 
city's allocation shall exceed $210 on a per capita basis.  An 
amount sufficient to fund the state funded property tax credits, 
the refundable income tax credits, and the sales tax exemption, 
as authorized pursuant to this section is appropriated to the 
commissioner of revenue.  Upon designation of an enterprise zone 
the commissioner shall certify the total amount available for 
tax reductions in the zone for its duration.  The amount 
certified shall reduce the amount available for tax reductions 
in other enterprise zones.  If subsequent estimates indicate or 
actual experience shows that the approved tax reductions will 
result in amounts of tax reductions in excess of the amount 
certified for the zone, the commissioner shall implement a plan 
to reduce the available tax reductions in the zone to an amount 
within the sum certified for the zone.  If subsequent estimates 
indicate or actual experience shows that the approved tax 
reductions will result in amounts of tax reductions below the 
amount certified, the difference shall be available for 
certification in other zones or used in connection with an 
amended plan of tax reductions for the zone as the commissioner 
determines appropriate.  If the tax reductions authorized result 
in reduced revenues for a dedicated fund, the commissioner of 
finance shall transfer equivalent amounts to the dedicated fund 
from the general fund as necessary.  Of the $36,400,000 in tax 
reductions authorized under this subdivision, an additional 
$800,000 in tax reductions may be authorized within an 
enterprise zone located within five municipalities that was 
designated by the commissioner in 1984. 
     Subd. 8.  [ADDITIONAL ENTERPRISE ZONE ALLOCATIONS.] (a) In 
addition to tax reductions authorized in subdivision 7, the 
commissioner may allocate $600,000 for tax reductions pursuant 
to section 172, subdivisions 1 to 8, to hardship area zones or 
border city zones.  Of this amount, a minimum of $200,000 must 
be allocated to an area added to an enterprise zone pursuant to 
Laws 1986, chapter 465, article 2, section 3.  Allocations made 
pursuant to this subdivision may not be used to reduce a tax 
liability, or increase a tax refund, prior to July 1, 1987.  
Limits on the maximum allocation to a zone imposed by 
subdivision 7 do not apply to allocations made under this 
subdivision.  
    (b) A city encompassing an enterprise zone, or portion of 
an enterprise zone, qualifies for an additional allocation under 
this subdivision if the following requirements are met:  
    (1) the city encompassing an enterprise zone, or portion of 
an enterprise zone, has signed contracts with qualifying 
businesses that commit the city's total initial allocation 
received pursuant to subdivision 7; and 
    (2) the city encompassing an enterprise zone, or portion of 
an enterprise zone, submits an application to the commissioner 
requesting an additional allocation for tax reductions 
authorized by section 172, subdivisions 1 to 8.  The application 
must identify a specific business expansion project which would 
not take place but for the availability of enterprise zone tax 
incentives.  
    (c) The commissioner shall use the following criteria when 
determining which qualifying cities shall receive an additional 
allocation under this subdivision and the amount of the 
additional allocation the city is to receive:  
    (1) additional allocations to qualifying cities under this 
subdivision shall be made within 60 days of receipt of an 
application;  
    (2) applications from cities with the highest level of 
economic distress, as determined using criteria listed in 
section 169, subdivision 4, paragraph (a), clauses (1) to (5), 
shall receive priority for an additional allocation under this 
subdivision; 
    (3) if the commissioner determines that two cities 
submitting applications within one week of each other have equal 
levels of economic distress, the application from the city with 
the business prospect which will have the greatest positive 
economic impact shall receive priority for an additional 
allocation.  Criteria used by the commissioner to determine the 
potential economic impact a business would have shall include 
the number of jobs created and retained, the amount of private 
investment which will be made by the business, and the extent to 
which the business would help alleviate the economic distress in 
the immediate community; and 
    (4) the commissioner shall determine the amount of any 
additional allocation a city may receive.  The commissioner 
shall base the amount of additional allocations on the 
commissioner's determination of the amount of tax incentives 
which are necessary to ensure the business prospect will expand 
in the city.  No single allocation under this subdivision may 
exceed $100,000.  No city may receive more than $250,000 under 
this subdivision. 
    Sec. 171.  [469.170] [TAX CLASSIFICATION OF EMPLOYMENT 
PROPERTY.] 
    Subdivision 1.  [MUNICIPAL APPLICATIONS.] The governing 
body of any municipality that contains an enterprise zone 
designated under section 168 shall by resolution establish a 
program for classification of new property or improvements to 
existing property as employment property pursuant to the 
provisions of this section.  Applications for classification 
under the program shall be filed with the municipal clerk or 
auditor in a form prescribed by the commissioner of revenue, 
with additions as prescribed by the governing body.  The 
application shall contain, where appropriate, a legal 
description of the parcel of land on which the facility is to be 
situated or improved; a general description of the facility or 
improvement and its proposed use; the probable time schedule for 
undertaking any construction or improvement; and information 
regarding the findings required in subdivision 4; the market 
value and the assessed value of the land and of all other 
taxable property then situated on it, according to the most 
recent assessment; and, if the property is to be improved or 
expanded, an estimate of the probable cost of the new 
construction or improvement and the market value of the new or 
improved facility (excluding land) when completed.  
    Subd. 2.  [HEARING.] Upon receipt of an application the 
municipal clerk or auditor, subject to any prior approval 
required by the resolution establishing the program, shall 
furnish a copy to the assessor for the property and to the 
governing body of each school district and other public body 
authorized to levy taxes on the property.  The municipal clerk 
or auditor shall publish a notice in the official newspaper of 
the time and place of a hearing to be held by the governing body 
on the application, not less than 30 days after the notice is 
published.  The notice shall state that the applicant, the 
assessor, representatives of the affected taxing authorities, 
and any taxpayer of the municipality may be heard or may present 
their views in writing at or before the hearing.  The hearing 
may be adjourned from time to time, but the governing body shall 
take action on the application by resolution within 30 days 
after the hearing ends.  If disapproved, the reasons shall be 
set forth in the resolution.  The applicant may appeal to the 
commissioner of revenue within 30 days thereafter, but only on 
the ground that the determination is arbitrary, in relation to 
prior determinations as to classification under the program, or 
based upon a mistake of law.  If approved, the resolution shall 
include determinations as to the findings required in 
subdivision 4, and the clerk or auditor shall transmit it to the 
commissioner.  
    Subd. 3.  [COMMISSIONER'S ACTION.] Within 60 days after 
receipt of an approved application or an appeal from the 
disapproval of an application, the commissioner of revenue shall 
take action on it.  The commissioner of revenue shall approve 
each application approved by the governing body if he finds that 
it complies with the provisions of this section.  If he 
disapproves the application, or finds grounds exist for appeal 
of a disapproved application, he shall transmit the finding to 
the governing body and the applicant.  When grounds for appeal 
have been determined to exist, the governing body shall 
reconsider and take further action on the application within 30 
days after receipt of the commissioner's notice and serve 
written notice of the action upon the applicant.  The applicant, 
within 30 days after receipt of notice of final disapproval by 
the commissioner of revenue or the governing body, may appeal 
from the disapproval to a court of competent jurisdiction. 
    Subd. 4.  [HARDSHIP AREA ZONE CRITERIA.] In the case of 
hardship area zones, an application shall not be approved unless 
the governing body finds that the construction or improvement of 
the facility: 
    (1) is reasonably likely to create new employment or 
prevent a loss of employment in the municipality;  
    (2) is not likely to have the effect of transferring 
existing employment from one or more other municipalities within 
the state;  
    (3) is not likely to cause the total market value of 
employment property within the municipality to exceed five 
percent of the total market value of all taxable property within 
the municipality; or, if it will, considering the amount of 
additional municipal services likely to be required for the 
employment property, is not likely to substantially impede the 
operation or the financial integrity of the municipality or any 
other public body levying taxes on property in the municipality; 
and 
    (4) will not result in the reduction of the assessed value 
of existing property within the municipality owned by the 
applicant, through abandonment, demolition, or otherwise, 
without provision for the restoration of the existing property 
within a reasonable time in a manner sufficient to restore the 
assessed valuation.  
    Subd. 5.  [BORDER CITY ZONE CRITERIA.] In the case of 
border city zones, an application for assessment as employment 
property under section 273.13, subdivision 24, paragraph (b), or 
for a tax reduction pursuant to section 172, subdivision 1, may 
not be approved unless the governing body finds that the 
construction or improvement of the facility is not likely to 
have the effect of transferring existing employment from one or 
more other municipalities within the state.  
    Subd. 6.  [CLASSIFICATION.] Property shall be classified as 
employment property and assessed as provided for class 4d 
property in section 273.13, subdivision 24, paragraph (b), for 
taxes levied in the year in which the classification is approved 
and for the four succeeding years after the approval.  If the 
classification is revoked, the revocation is effective for taxes 
levied in the next year after revocation.  
    Subd. 7.  [REVOCATION.] The governing body may request the 
commissioner of revenue to approve the revocation of a 
classification pursuant to this section if it finds by 
resolution that:  
    (1) the construction or improvement of the facility has not 
been completed within two years after the approval of the 
classification, or any longer period that may have been allowed 
in the approving resolution or may be necessary due to 
circumstances not reasonably within the control of the 
applicant; or 
    (2) the applicant has not proceeded in good faith with the 
construction or improvement of the facility, or with its 
operation, in a manner which is consistent with the purpose of 
this section and is possible under circumstances reasonably 
within the control of the applicant.  
    The findings may be made only after a hearing held upon 
notice mailed to the applicant by certified mail at least 60 
days before the hearing.  
    Subd. 8.  [HEARING.] Upon receipt of the request for 
revocation, the commissioner of revenue shall notify the 
applicant and the governing body of a time and place at which 
the applicant may be heard.  The hearing must be held within 30 
days after receipt of the request.  Within 30 days after the 
hearing, the commissioner of revenue shall determine whether the 
facts and circumstances are grounds for revocation as 
recommended by the governing body.  If the commissioner of 
revenue revokes the classification, the applicant may appeal 
from the order to a court of competent jurisdiction at any time 
within 30 days after revocation. 
    Subd. 9.  [ECONOMIC DIVERSIFICATION PROJECTS.] 
Notwithstanding any provision of sections 167 to 174 to the 
contrary, a municipality may classify the property of a business 
provided special assistance as a qualified economic 
diversification project pursuant to section 116M.07, subdivision 
11, clause (d), as employment property under provisions of this 
section. 
    Sec. 172.  [469.171] [STATE TAX REDUCTIONS.] 
    Subdivision 1.  [AUTHORIZED TYPES.] The following types of 
tax reductions may be approved by the commissioner for 
businesses located in an enterprise zone: 
    (1) an exemption from the general sales tax imposed by 
chapter 297A for purchases of construction materials or 
equipment for use in the zone if the purchase was made after the 
date of application for the zone; 
    (2) a credit against the income tax of an employer for 
additional workers employed in the zone, other than workers 
employed in construction, up to a maximum of $3,000 per employee 
per year;  
    (3) an income tax credit for a percentage of the cost of 
debt financing to construct new or expanded facilities in the 
zone; and 
    (4) a state paid property tax credit for a portion of the 
property taxes paid by a new commercial or industrial facility 
or the additional property taxes paid by an expansion of an 
existing commercial or industrial facility in the zone.  
    Subd. 2.  [MUNICIPALITY TO SPECIFY.] The municipality shall 
specify in its application for designation the types of tax 
reductions it seeks to be made available in the zone and the 
percentage rates and other appropriate limitations on the 
reductions.  
    Subd. 3.  [COMMISSIONER OF REVENUE ACTION.] Upon 
designation of an enterprise zone and approval by the 
commissioner of the tax reductions to be made available therein, 
the commissioner of revenue shall implement the tax reductions.  
    Subd. 4.  [RESTRICTION.] The tax reductions provided by 
this section shall not apply to any facility described in 
section 103(b)(6)(O) of the Internal Revenue Code of 1986, as 
amended through December 31, 1986, or to any regulated public 
utility.  
    Subd. 5.  [BORDER CITY AREAS.] The commissioner shall 
approve tax reductions authorized by subdivision 1 within a 
border city zone only after the governing body of a city 
designated as an enterprise zone has designated an area or 
areas, each consisting of at least 100 acres, of the city not in 
excess of 400 acres in which the tax reductions may be provided. 
    Subd. 6.  [ADDITIONAL BORDER CITY TAX REDUCTIONS.] In 
addition to the tax reductions authorized by subdivision 1, for 
a border city zone, the following types of tax reductions may be 
approved:  
    (1) a credit against income tax for workers employed in the 
zone and not qualifying for a credit under subdivision 1, clause 
(2), subject to a maximum of $1,500 per employee per year; 
    (2) a state paid property tax credit for a portion of the 
property taxes paid by a commercial or industrial facility 
located in the zone.  Notwithstanding subdivision 4, the credits 
provided by this subdivision may be provided to the businesses 
described in section 103(b)(6)(0)(i) of the Internal Revenue 
Code of 1986, as amended through December 31, 1986. 
    Subd. 7.  [DURATION.] Each tax reduction provided to a 
business pursuant to this subdivision shall terminate not longer 
than five years after the effective date of the tax reduction 
for the business. Subject to the five-year limitation, the tax 
reductions may be provided after expiration of the zone's 
designation.  
    Subd. 8.  [REFUNDABLE CREDITS.] The income tax credits 
provided pursuant to subdivisions 1 and 6 may be refundable. 
    Subd. 9.  [RECAPTURE.] Any business that (1) receives tax 
reductions authorized by subdivisions 1 to 8, classification as 
employment property pursuant to section 171, or an alternative 
local contribution under section 170, subdivision 5; and (2) 
ceases to operate its facility located within the enterprise 
zone within two years after the expiration of the tax reductions 
shall repay the amount of the tax reduction or local 
contribution pursuant to the following schedule:  
      Termination                                   Repayment
      of operations                                  Portion
      Less than 6 months                            100 percent
      6 months or more but less than 12 months       75 percent
      12 months or more but less than 18 months      50 percent
      18 months or more but less than 24 months      25 percent
    The repayment must be paid to the state to the extent it 
represents a tax reduction under subdivisions 1 to 8 and to the 
municipality to the extent it represents a property tax 
reduction or other local contribution.  Any amount repaid to the 
state must be credited to the amount certified as available for 
tax reductions in the zone pursuant to section 170, subdivision 
7.  Any amount repaid to the municipality must be used by the 
municipality for economic development purposes.  
    Sec. 173.  [469.172] [DEVELOPMENT AND REDEVELOPMENT 
POWERS.] 
    Notwithstanding any contrary provision of law or charter, 
any city of the first or second class that contains an 
enterprise zone or that has been designated as an enterprise 
zone may, in addition to its other powers, exercise the powers 
granted to a governmental subdivision by sections 1 to 47, 49 to 
69, and 110 to 114.  Section 60, subdivision 15, shall apply to 
the city in the exercise of the powers granted pursuant to this 
section.  It may exercise the powers assigned to redevelopment 
agencies pursuant to sections 153 to 166, without limitation to 
further the purposes of sections 1 to 47, 49 to 69, and 110 to 
135.  It may exercise the powers set forth in sections 1 to 47, 
49 to 69, and 110 to 165 without limitation to further the 
purposes and policies set forth in sections 153 to 166.  It may 
exercise the powers granted by this subdivision and any other 
development or redevelopment powers authorized by other laws, 
including sections 125 to 135 and 153 to 166, independently or 
in conjunction with each other as though all the powers had been 
granted to a single entity.  Any project undertaken to 
accomplish the purposes of sections 1 to 47 that qualifies as 
single-family housing under section 462C.02, subdivision 4, 
shall be subject to the provisions of chapter 462C.  
     Upon expiration of the designation of the enterprise zone, 
the powers granted by this subdivision may be exercised only 
with respect to any project, program, or activity commenced or 
established prior to that date.  The powers granted by this 
subdivision may only be exercised within the zone.  
    Sec. 174.  [469.173] [ADMINISTRATION.] 
    Subdivision 1.  [TECHNICAL ASSISTANCE.] The commissioner 
shall provide technical assistance to small municipalities 
seeking designation of an area as an enterprise zone.  For 
purposes of this subdivision, a small municipality means a 
municipality with a population of 20,000 or less.  
    Subd. 2.  [ADMINISTRATIVE PROCEDURE ACT.] The provisions of 
chapter 14 shall not apply to designation of enterprise zones.  
    Subd. 3.  [FEDERAL DESIGNATIONS.] The commissioner may 
accept applications for and may at any time grant a contingent 
designation of area as an enterprise zone for purposes of 
seeking a designation of the area as a federally designated 
zone.  For purposes of the designations, the commissioner may 
waive any of the requirements or limitations on designations 
contained in this section.  If the contingent designation would 
require funding in excess of the amount available pursuant to 
section 170, subdivision 7, the commissioner shall inform the 
members of the legislative advisory commission and shall submit 
a request for the necessary funding to the tax and 
appropriations committees of the legislature.  
    Subd. 4.  [REPORTING.] The commissioner shall require 
municipalities receiving enterprise zone designations to report 
to the state regarding the economic activity that has occurred 
in the zone following the designation.  This information shall 
include the number of jobs created in the zone, the number of 
economically disadvantaged individuals hired in the zone, the 
average wage level of the jobs created, and descriptions of any 
affirmative action programs undertaken by the municipality in 
connection with the zone.  The amount of the municipality's 
local contribution and the number of businesses qualifying for 
or directly benefiting from the local contribution must be 
reported annually to the commissioner.  
    Subd. 5.  [INFORMATION SHARING.] Notwithstanding the 
provisions of sections 290.61 and 297A.43, the commissioner of 
revenue may share information with the commissioner or with a 
municipality receiving an enterprise zone designation, insofar 
as necessary to administer the funding limitations provided by 
section 170, subdivision 7. 
    Subd. 6.  [ZONE BOUNDARY REALIGNMENT.] The commissioner may 
approve specific applications by a municipality to amend the 
boundaries of a zone or of an area or areas designated pursuant 
to section 172, subdivision 5, at any time.  Boundaries of a 
zone may not be amended to create noncontiguous subdivisions.  
If the commissioner approves the amended boundaries, the change 
is effective on the date of approval.  Notwithstanding the area 
limitation under section 169, subdivision 3, the commissioner 
may approve a specific application to amend the boundaries of an 
enterprise zone which is located within five municipalities and 
was designated in 1984, to increase its area to not more than 
800 acres, and may approve an additional specific application to 
amend the boundaries of that enterprise zone to include a sixth 
municipality or to further increase its area to include all or 
part of the territory of a town that surrounds one of the five 
municipalities, or both.  
    Subd. 7.  [REPEALER.] Sections 170, 172, 173, and this 
section are repealed effective December 31, 1996.  

                        TAX INCREMENT FINANCING  
    Sec. 175.  [469.174] [DEFINITIONS.] 
    Subdivision 1.  [GENERALLY.] In sections 175 to 180, the 
terms defined in this section have the meanings given them 
herein, unless the context indicates a different meaning. 
    Subd. 2.  [AUTHORITY.] "Authority" means a rural 
development financing authority created pursuant to sections 143 
to 151, a housing and redevelopment authority created pursuant 
to sections 1 to 47; a port authority created pursuant to 
sections 49 to 69; an economic development authority created 
pursuant to sections 91 to 109; a redevelopment agency as 
defined in sections 153 to 166; a municipality that is 
administering a development district created pursuant to 
sections 125 to 135 or any special law, a municipality that 
undertakes a project pursuant to sections 153 to 166; or a 
municipality that exercises the powers of a port authority 
pursuant to any general or special law.  
    Subd. 3.  [BONDS.] "Bonds" means any bonds, including 
refunding bonds, notes, interim certificates, debentures, or 
other obligations issued by an authority under section 179 or 
which were issued in aid of a project under any other law, 
except revenue bonds issued pursuant to sections 153 to 166, 
prior to August 1, 1979. 
    Subd. 4.  [CAPTURED ASSESSED VALUE.] "Captured assessed 
value" means the amount by which the current assessed value of a 
tax increment financing district exceeds the original assessed 
value, including the value of property normally taxable as 
personal property by reason of its location on or over property 
owned by a tax-exempt entity.  
    Subd. 5.  [GOVERNING BODY.] "Governing body" means the 
elected council or board of a municipality.  
    Subd. 6.  [MUNICIPALITY.] "Municipality" means any city, 
however organized, and with respect to a project undertaken 
pursuant to sections 153 to 166, "municipality" has the meaning 
given in sections 153 to 166, and with respect to a project 
undertaken pursuant to sections 143 to 152, or a county or 
multi-county project undertaken pursuant to sections 4 to 8, 
"municipality" also includes any county. 
    Subd. 7.  [ORIGINAL ASSESSED VALUE.] "Original assessed 
value" means the assessed value of all taxable real property 
within a tax increment financing district as most recently 
certified by the commissioner of revenue as of the date of the 
request by an authority for certification by the county auditor, 
together with subsequent adjustments as set forth in section 
178, subdivisions 1 and 4.  In determining the original assessed 
value the assessed value of real property exempt from taxation 
at the time of the request shall be zero, except for real 
property which is tax exempt by reason of public ownership by 
the requesting authority and which has been publicly owned for 
less than one year prior to the date of the request for 
certification, in which event the assessed value of the property 
shall be the assessed value as most recently determined by the 
commissioner of revenue.  For purposes of this subdivision, 
"real property" shall include any property normally taxable as 
personal property by reason of its location on or over 
publicly-owned property.  
    Subd. 8.  [PROJECT.] "Project" means a project as described 
in section 143; an industrial development district as described 
in section 59, subdivision 1; an economic development district 
as described in section 102, subdivision 1; a project as defined 
in section 2, subdivision 12; a development district as defined 
in section 126, subdivision 8, or any special law; or a project 
as defined in section 154, subdivision 2, paragraphs (a), (b), 
or (c). 
    Subd. 9.  [TAX INCREMENT FINANCING DISTRICT.] "Tax 
increment financing district" or "district" means a contiguous 
or noncontiguous geographic area within a project delineated in 
the tax increment financing plan, as provided by section 176, 
subdivision 1, for the purpose of financing redevelopment, mined 
underground space development, housing or economic development 
in municipalities through the use of tax increment generated 
from the captured assessed value in the tax increment financing 
district.  
    Subd. 10.  [REDEVELOPMENT DISTRICT.] (a) "Redevelopment 
district" means a type of tax increment financing district 
consisting of a project, or portions of a project, within which 
the authority finds by resolution that one of the following 
conditions, reasonably distributed throughout the district, 
exists: 
    (1) 70 percent of the parcels in the district are occupied 
by buildings, streets, utilities or other improvements and more 
than 50 percent of the buildings, not including outbuildings, 
are structurally substandard to a degree requiring substantial 
renovation or clearance; or 
    (2) 70 percent of the parcels in the district are occupied 
by buildings, streets, utilities or other improvements and 20 
percent of the buildings are structurally substandard and an 
additional 30 percent of the buildings are found to require 
substantial renovation or clearance in order to remove such 
existing conditions as:  inadequate street layout, incompatible 
uses or land use relationships, overcrowding of buildings on the 
land, excessive dwelling unit density, obsolete buildings not 
suitable for improvement or conversion, or other identified 
hazards to the health, safety and general well-being of the 
community; or 
    (3) less than 70 percent of the parcels in the district are 
occupied by buildings, streets, utilities or other improvements, 
but due to unusual terrain or soil deficiencies requiring 
substantial filling, grading or other physical preparation for 
use at least 80 percent of the total acreage of such land has a 
fair market value upon inclusion in the redevelopment district 
which, when added to the estimated cost of preparing that land 
for development, excluding costs directly related to roads as 
defined in section 160.01 and local improvements as described in 
section 429.021, subdivision 1, clauses 1 to 7, 11 and 12, and 
430.01, if any, exceeds its anticipated fair market value after 
completion of the preparation.  No parcel shall be included 
within a redevelopment district pursuant to this paragraph 
unless the authority has concluded an agreement or agreements 
for the development of at least 50 percent of the acreage having 
the unusual soil or terrain deficiencies, which agreement 
provides recourse for the authority should the development not 
be completed; or 
    (4) the property consists of underutilized air rights 
existing over a public street, highway or right-of-way; or 
    (5) the property consists of vacant, unused, underused, 
inappropriately used or infrequently used railyards, rail 
storage facilities or excessive or vacated railroad 
rights-of-way; or 
    (6) the district consists of an existing or proposed 
industrial park no greater in size than 250 acres, which 
contains a sewage lagoon contaminated with polychlorinated 
biphenyls.  
    (b) For purposes of this subdivision, "structurally 
substandard" shall mean containing defects in structural 
elements or a combination of deficiencies in essential utilities 
and facilities, light and ventilation, fire protection including 
adequate egress, layout and condition of interior partitions, or 
similar factors, which defects or deficiencies are of sufficient 
total significance to justify substantial renovation or 
clearance.  
    Subd. 11.  [HOUSING DISTRICT.] "Housing district" means a 
type of tax increment financing district which consists of a 
project, or a portion of a project, intended for occupancy, in 
part, by persons or families of low and moderate income, as 
defined in chapter 462A, Title II of the National Housing Act of 
1934, the National Housing Act of 1959, the United States 
Housing Act of 1937, as amended, Title V of the Housing Act of 
1949, as amended, any other similar present or future federal, 
state, or municipal legislation, or the regulations promulgated 
under any of those acts. 
    Subd. 12.  [ECONOMIC DEVELOPMENT DISTRICT.] "Economic 
development district" means a type of tax increment financing 
district which consists of any project, or portions of a 
project, not meeting the requirements found in the definition of 
redevelopment district, mined underground space development 
district or housing district, but which the authority finds to 
be in the public interest because: 
    (1) it will discourage commerce, industry or manufacturing 
from moving their operations to another state; or 
    (2) it will result in increased employment in the 
municipality; or 
    (3) it will result in preservation and enhancement of the 
tax base of the municipality. 
    Subd. 13.  [MINED UNDERGROUND SPACE DEVELOPMENT DISTRICT.] 
"Mined underground space development district" means a type of 
tax increment financing district consisting of a project, or 
portions of a project, for the development or redevelopment of 
mined underground space pursuant to sections 136 to 142. 
    Subd. 14.  [ADMINISTRATIVE EXPENSES.] "Administrative 
expenses" means all expenditures of an authority other than 
amounts paid for the purchase of land or amounts paid to 
contractors or others providing materials and services, 
including architectural and engineering services, directly 
connected with the physical development of the real property in 
the district, relocation benefits paid to or services provided 
for persons residing or businesses located in the district, or 
amounts used to pay interest on, fund a reserve for, or sell at 
a discount bonds issued pursuant to section 179.  
"Administrative expenses" includes amounts paid for services 
provided by bond counsel, fiscal consultants, and planning or 
economic development consultants.  
    Subd. 15.  [PARCEL.] "Parcel" means a tract or plat of land 
established prior to the certification of the district as a 
single unit for purposes of assessment. 
    Sec. 176.  [469.175] [ESTABLISHING, MODIFYING TAX INCREMENT 
FINANCING PLAN, ANNUAL ACCOUNTS.] 
    Subdivision 1.  [TAX INCREMENT FINANCING PLAN.] A tax 
increment financing plan shall contain:  
    (1) a statement of objectives of an authority for the 
improvement of a project;  
    (2) a statement as to the development program for the 
project, including the property within the project, if any, that 
the authority intends to acquire;  
    (3) a list of any development activities that the plan 
proposes to take place within the project, for which contracts 
have been entered into at the time of the preparation of the 
plan, including the names of the parties to the contract, the 
activity governed by the contract, the cost stated in the 
contract, and the expected date of completion of that activity;  
    (4) identification or description of the type of any other 
specific development reasonably expected to take place within 
the project, and the date when the development is likely to 
occur;  
    (5) estimates of the following:  
    (i) cost of the project, including administration expenses; 
    (ii) amount of bonded indebtedness to be incurred; 
    (iii) sources of revenue to finance or otherwise pay public 
costs; 
    (iv) the most recent assessed value of taxable real 
property within the tax increment financing district; 
    (v) the estimated captured assessed value of the tax 
increment financing district at completion; and 
    (vi) the duration of the tax increment financing district's 
existence; and 
    (6) a statement of the authority's estimate of the impact 
of tax increment financing on the assessed values of all taxing 
jurisdictions in which the tax increment financing district is 
located in whole or in part. 
    Subd. 2.  [CONSULTATIONS; COMMENT AND FILING.] Before 
formation of a tax increment financing district, the authority 
shall provide an opportunity to the members of the county boards 
of commissioners of any county in which any portion of the 
proposed district is located and the members of the school board 
of any school district in which any portion of the proposed 
district is located to meet with the authority.  The authority 
shall present to the members of the county boards of 
commissioners and the school boards its estimate of the fiscal 
and economic implications of the proposed tax increment 
financing district.  The members of the county boards of 
commissioners and the school boards may present their comments 
at the public hearing on the tax increment financing plan 
required by subdivision 3.  The county auditor shall not certify 
the original assessed value of a district pursuant to section 
178, subdivision 1, until the county board of commissioners has 
presented its written comment on the proposal to the authority, 
or 30 days has passed from the date of the transmittal by the 
authority to the board of the information regarding the fiscal 
and economic implications, whichever occurs first.  Upon 
adoption of the tax increment financing plan, the authority 
shall file a copy of the plan with the commissioner of energy 
and economic development.  The authority must also file with the 
commissioner a copy of the development plan for the project area.
    Subd. 3.  [MUNICIPALITY APPROVAL.] A county auditor shall 
not certify the original assessed value of a tax increment 
financing district until the tax increment financing plan 
proposed for that district has been approved by the municipality 
in which the district is located.  If an authority that proposes 
to establish a tax increment financing district and the 
municipality are not the same, the authority shall apply to the 
municipality in which the district is proposed to be located and 
shall obtain the approval of its tax increment financing plan by 
the municipality before the authority may use tax increment 
financing.  The municipality shall approve the tax increment 
financing plan only after a public hearing thereon after 
published notice in a newspaper of general circulation in the 
municipality at least once not less than ten days nor more than 
30 days prior to the date of the hearing.  This hearing may be 
held before or after the approval or creation of the project or 
it may be held in conjunction with a hearing to approve the 
project.  Before or at the time of approval of the tax increment 
financing plan, the municipality shall make the following 
findings, and shall set forth in writing the reasons and 
supporting facts for each determination: 
    (1) that the proposed tax increment financing district is a 
redevelopment district, a mined underground space development 
district, a housing district or an economic development district.
    (2) that the proposed development or redevelopment, in the 
opinion of the municipality, would not reasonably be expected to 
occur solely through private investment within the reasonably 
foreseeable future and therefore the use of tax increment 
financing is deemed necessary. 
    (3) that the tax increment financing plan conforms to the 
general plan for the development or redevelopment of the 
municipality as a whole. 
    (4) that the tax increment financing plan will afford 
maximum opportunity, consistent with the sound needs of the 
municipality as a whole, for the development or redevelopment of 
the project by private enterprise. 
    (5) that the municipality elects the method of tax 
increment computation set forth in section 178, subdivision 3, 
clause (b), if applicable. 
    When the municipality and the authority are not the same, 
the municipality shall approve or disapprove the tax increment 
financing plan within 60 days of submission by the authority, or 
the plan shall be deemed approved.  When the municipality and 
the authority are not the same, the municipality may not amend 
or modify a tax increment financing plan except as proposed by 
the authority pursuant to subdivision 4.  Once approved, the 
determination of the authority to undertake the project through 
the use of tax increment financing and the resolution of the 
governing body shall be conclusive of the findings therein and 
of the public need for the financing. 
    Subd. 4.  [MODIFICATION OF PLAN.] A tax increment financing 
plan may be modified by an authority, provided that any 
reduction or enlargement of geographic area of the project or 
tax increment financing district, increase in amount of bonded 
indebtedness to be incurred, including a determination to 
capitalize interest on the debt if that determination was not a 
part of the original plan, or to increase or decrease the amount 
of interest on the debt to be capitalized, increase in the 
portion of the captured assessed value to be retained by the 
authority, increase in total estimated tax increment 
expenditures or designation of additional property to be 
acquired by the authority shall be approved upon the notice and 
after the discussion, public hearing and findings required for 
approval of the original plan; provided that if an authority 
changes the type of district from housing, redevelopment or 
economic development to another type of district, this change 
shall not be considered a modification but shall require the 
authority to follow the procedure set forth in sections 175 to 
180 for adoption of a new plan, including certification of the 
assessed valuation of the district by the county auditor. 
    The geographic area of a tax increment financing district 
may be reduced, but shall not be enlarged after five years 
following the date of certification of the original assessed 
value by the county auditor or after August 1, 1984, for tax 
increment financing districts authorized prior to August 1, 
1979, except that development districts created pursuant to 
Minnesota Statutes 1978, chapter 472A, prior to August 1, 1979 
may be reduced but shall not be enlarged after five years 
following the date of designation of the district. 
    Subd. 5.  [ANNUAL DISCLOSURE.] For all tax increment 
financing districts, whether created prior or subsequent to 
August 1, 1979, on or before July 1 of each year, the authority 
shall submit to the county board, the school board, the 
commissioner of energy and economic development and, if the 
authority is other than the municipality, the governing body of 
the municipality a report of the status of the district.  The 
report shall include the following information:  the amount and 
the source of revenue in the account, the amount and purpose of 
expenditures from the account, the amount of any pledge of 
revenues, including principal and interest on any outstanding 
bonded indebtedness, the original assessed value of the 
district, the captured assessed value retained by the authority, 
the captured assessed value shared with other taxing districts, 
the tax increment received and any additional information 
necessary to demonstrate compliance with any applicable tax 
increment financing plan.  An annual statement showing the tax 
increment received and expended in that year, the original 
assessed value, captured assessed value, amount of outstanding 
bonded indebtedness and any additional information the authority 
deems necessary shall be published in a newspaper of general 
circulation in the municipality. 
    Subd. 6.  [FINANCIAL REPORTING.] (a) The state auditor 
shall develop a uniform system of accounting and financial 
reporting for tax increment financing districts.  The system of 
accounting and financial reporting shall, as nearly as possible: 
    (1) provide for full disclosure of the sources and uses of 
public funds in the district; 
    (2) permit comparison and reconciliation with the affected 
local government's accounts and financial reports; 
    (3) permit auditing of the funds expended on behalf of a 
district, including a single district that is part of a 
multidistrict project or that is funded in part or whole through 
the use of a development account funded with tax increments from 
other districts or with other public money; 
    (4) be consistent with generally accepted accounting 
principles. 
    (b) The authority must annually submit to the state 
auditor, on or before July 1, a financial report in compliance 
with paragraph (a).  Copies of the report must also be provided 
to the county and school district boards and to the governing 
body of the municipality, if the authority is not the 
municipality.  To the extent necessary to permit compliance with 
the requirement of financial reporting, the county and any other 
appropriate local government unit or private entity must provide 
the necessary records or information to the authority or the 
state auditor as provided by the system of accounting and 
financial reporting developed pursuant to paragraph (a). 
    (c) The annual financial report must also include the 
following items: 
    (1) the original assessed value of the district; 
    (2) the captured assessed value of the district, including 
the amount of any captured assessed value shared with other 
taxing districts; 
    (3) the outstanding principal amount of bonds issued or 
other loans incurred to finance project costs in the district; 
    (4) for the reporting period and for the duration of the 
district, the amount budgeted under the tax increment financing 
plan, and the actual amount expended for, at least, the 
following categories: 
    (i) acquisition of land and buildings through condemnation 
or purchase; 
    (ii) site improvements or preparation costs; 
    (iii) installation of public utilities or other public 
improvements; 
    (iv) administrative costs, including the allocated cost of 
the authority; 
    (5) for properties sold to developers, the total cost of 
the property to the authority and the price paid by the 
developer; 
    (6) the amount of tax exempt obligations, other than those 
reported under clause (3), that were issued on behalf of private 
entities for facilities located in the district. 
    (d) The reporting requirements imposed by this subdivision 
are in lieu of the annual disclosure required by subdivision 5. 
    Sec. 177.  [469.176] [LIMITATIONS.] 
    Subdivision 1.  [DURATION OF TAX INCREMENT FINANCING 
DISTRICTS.] (a) Subject to the limitations contained in 
paragraphs (b) to (f), any tax increment financing district as 
to which bonds are outstanding, payment for which the tax 
increment and other revenues have been pledged, shall remain in 
existence at least as long as the bonds continue to be 
outstanding.  
    (b) The tax increment pledged to the payment of the bonds 
and interest thereon may be discharged and the tax increment 
financing district may be terminated if sufficient funds have 
been irrevocably deposited in the debt service fund or other 
escrow account held in trust for all outstanding bonds to 
provide for the payment of the bonds at maturity or date of 
redemption and interest thereon to the maturity or redemption 
date.  
    (c) For bonds issued pursuant to section 179, subdivisions 
2 and 3, the full faith and credit and any taxing powers of the 
municipality or authority shall continue to be pledged to the 
payment of the bonds until the principal of and interest on the 
bonds has been paid in full.  
    (d) No tax increment shall be paid to an authority for a 
tax increment financing district after three years from the date 
of certification of the original assessed value of the taxable 
real property in the district by the county auditor or after 
August 1, 1982, for tax increment financing districts authorized 
prior to August 1, 1979, unless within the three year period (1) 
bonds have been issued pursuant to section 179, or in aid of a 
project pursuant to any other law, except revenue bonds issued 
pursuant to sections 153 to 166, prior to August 1, 1979, or (2) 
the authority has acquired property within the district, or (3) 
the authority has constructed or caused to be constructed public 
improvements within the district.  
    (e) No tax increment shall in any event be paid to the 
authority from a redevelopment district after 25 years from date 
of receipt by the authority of the first tax increment, after 25 
years from the date of the receipt for a housing district, after 
25 years from the date of the receipt for a mined underground 
space development district, and after eight years from the date 
of the receipt, or ten years from approval of the tax increment 
financing plan, whichever is less, for an economic development 
district. 
    For tax increment financing districts created prior to 
August 1, 1979, no tax increment shall be paid to the authority 
after 30 years from August 1, 1979. 
    (f) Modification of a tax increment financing plan pursuant 
to section 176, subdivision 4, shall not extend the durational 
limitations of this subdivision. 
    Subd. 2.  [EXCESS TAX INCREMENTS.] In any year in which the 
tax increment exceeds the amount necessary to pay the costs 
authorized by the tax increment financing plan, including the 
amount necessary to cancel any tax levy as provided in section 
475.61, subdivision 3, the authority shall use the excess amount 
to do any of the following:  (1) prepay any outstanding bonds, 
(2) discharge the pledge of tax increment therefor, (3) pay into 
an escrow account dedicated to the payment of such bond, or (4) 
return the excess amount to the county auditor who shall 
distribute the excess amount to the municipality, county and 
school district in which the tax increment financing district is 
located in direct proportion to their respective mill rates.  
The county auditor must report to the commissioner of education 
the amount of any excess tax increment distributed to a school 
district within 30 days of the distribution. 
    Subd. 3.  [LIMITATION ON ADMINISTRATIVE EXPENSES.] No tax 
increment shall be used to pay any administrative expenses for a 
project which exceed ten percent of the total tax increment 
expenditures authorized by the tax increment financing plan or 
the total tax increment expenditures for the project, whichever 
is less.  
    Subd. 4.  [LIMITATION ON USE OF TAX INCREMENT.] (a) All 
revenues derived from tax increment shall be used in accordance 
with the tax increment financing plan.  The revenues shall be 
used solely for the following purposes:  (1) to pay the 
principal of and interest on bonds issued to finance a project; 
(2) by a rural development financing authority for the purposes 
stated in section 143, by a port authority or municipality 
exercising the powers of a port authority to finance or 
otherwise pay the cost of redevelopment pursuant to sections 49 
to 69, by an economic development authority to finance or 
otherwise pay the cost of redevelopment pursuant to sections 91 
to 109, by a housing and redevelopment authority or economic 
development authority to finance or otherwise pay public 
redevelopment costs pursuant to sections 1 to 47, by a 
municipality or economic development authority to finance or 
otherwise pay the capital and administration costs of a 
development district pursuant to sections 125 to 135, by a 
municipality or redevelopment agency to finance or otherwise pay 
premiums for insurance or other security guaranteeing the 
payment when due of principal of and interest on the bonds 
pursuant to chapter 462C, sections 153 to 166, or both, or to 
accumulate and maintain a reserve securing the payment when due 
of the principal of and interest on the bonds pursuant to 
chapter 462C, sections 153 to 166, or both, which revenues in 
the reserve shall not exceed, subsequent to the fifth 
anniversary of the date of issue of the first bond issue secured 
by the reserve, an amount equal to 20 percent of the aggregate 
principal amount of the outstanding and nondefeased bonds 
secured by the reserve.  Revenue derived from tax increment from 
a mined underground space development district may be used only 
to pay for the costs of excavating and supporting the space, of 
providing public access to the mined underground space including 
roadways, and of installing utilities including fire sprinkler 
systems in the space.  
    (b) Revenues derived from tax increment may be used to 
finance the costs of an interest reduction program operated 
pursuant to section 12, subdivisions 7 to 10, or pursuant to 
other law granting interest reduction authority and power by 
reference to those subdivisions only under the following 
conditions:  (1) tax increments may not be collected for a 
program for a period in excess of 12 years after the date of the 
first interest rate reduction payment for the program, (2) tax 
increments may not be used for an interest reduction program, if 
the proceeds of bonds issued pursuant to section 179 after 
December 31, 1985, have been or will be used to provide 
financial assistance to the specific project which would receive 
the benefit of the interest reduction program, and (3) tax 
increments may not be used to finance an interest reduction 
program for owner-occupied single-family dwellings.  
    (c) These revenues shall not be used to circumvent existing 
levy limit law.  No revenues derived from tax increment shall be 
used for the construction or renovation of a municipally owned 
building used primarily and regularly for conducting the 
business of the municipality; this provision shall not prohibit 
the use of revenues derived from tax increments for the 
construction or renovation of a parking structure, a commons 
area used as a public park or a facility used for social, 
recreational or conference purposes and not primarily for 
conducting the business of the municipality.  
    Subd. 5.  [REQUIREMENT FOR AGREEMENTS.] No more than 25 
percent, by acreage, of the property to be acquired within a 
project which contains a redevelopment district, or ten percent, 
by acreage, of the property to be acquired within a project 
which contains a housing or economic development district, as 
set forth in the tax increment financing plan, shall at any time 
be owned by an authority as a result of acquisition with the 
proceeds of bonds issued pursuant to section 179 unless prior to 
acquisition in excess of the percentages, the authority has 
concluded an agreement for the development or redevelopment of 
the property acquired and which provides recourse for the 
authority should the development or redevelopment not be 
completed.  
    Subd. 6.  [ACTION REQUIRED.] If, after four years from the 
date of certification of the original assessed value of the tax 
increment financing district pursuant to section 178, no 
demolition, rehabilitation or renovation of property or other 
site preparation, including improvement of a street adjacent to 
a parcel but not installation of utility service including sewer 
or water systems, has been commenced on a parcel located within 
a tax increment financing district by the authority or by the 
owner of the parcel in accordance with the tax increment 
financing plan, no additional tax increment may be taken from 
that parcel, and the original assessed value of that parcel 
shall be excluded from the original assessed value of the tax 
increment financing district.  If the authority or the owner of 
the parcel subsequently commences demolition, rehabilitation or 
renovation or other site preparation on that parcel including 
improvement of a street adjacent to that parcel, in accordance 
with the tax increment financing plan, the authority shall 
certify to the county auditor that the activity has commenced, 
and the county auditor shall certify the assessed value thereof 
as most recently certified by the commissioner of revenue and 
add it to the original assessed value of the tax increment 
financing district.  
    Subd. 7.  [SUBSEQUENT DISTRICTS.] Except as provided in 
subdivision 6, for subsequent recertification of parcels 
eliminated from a district because of lack of development 
activity, no parcel that has been so eliminated subsequent to 
two years from the date of the original certification may be 
included in a tax increment district if, at any time during the 
20 years prior to the date when certification of the district is 
requested pursuant to section 178, subdivision 1, that parcel 
had been included in an economic development district.  
    Sec. 178.  [469.177] [COMPUTATION OF TAX INCREMENT.] 
    Subdivision 1.  [ORIGINAL ASSESSED VALUE.] Upon or after 
adoption of a tax increment financing plan, the auditor of any 
county in which the district is situated shall, upon request of 
the authority, certify the original assessed value of the tax 
increment financing district as described in the tax increment 
financing plan and shall certify in each year thereafter the 
amount by which the original assessed value has increased or 
decreased as a result of a change in tax exempt status of 
property within the district, reduction or enlargement of the 
district or changes pursuant to subdivision 4.  In the case of a 
mined underground space development district the county auditor 
shall certify the original assessed value as zero, plus the 
assessed value, if any, previously assigned to any subsurface 
area included in the mined underground space development 
district pursuant to section 272.04.  The amount to be added to 
the original assessed value of the district as a result of 
previously tax exempt real property within the district becoming 
taxable shall be equal to the assessed value of the real 
property as most recently assessed pursuant to section 273.18 
or, if that assessment was made more than one year prior to the 
date of title transfer rendering the property taxable, the value 
assessed by the assessor at the time of the transfer.  The 
amount to be added to the original assessed value of the 
district as a result of enlargements thereof shall be equal to 
the assessed value of the added real property as most recently 
certified by the commissioner of revenue as of the date of 
modification of the tax increment financing plan pursuant to 
section 176, subdivision 4.  Each year the auditor shall also 
add to the original assessed value of each economic development 
district an amount equal to the original assessed value for the 
preceding year multiplied by the average percentage increase in 
the assessed valuation of all property included in the economic 
development district during the five years prior to 
certification of the district.  The amount to be subtracted from 
the original assessed value of the district as a result of 
previously taxable real property within the district becoming 
tax exempt, or a reduction in the geographic area of the 
district, shall be the amount of original assessed value 
initially attributed to the property becoming tax exempt or 
being removed from the district.  If the assessed value of 
property located within the tax increment financing district is 
reduced by reason of a court-ordered abatement, stipulation 
agreement, voluntary abatement made by the assessor or auditor 
or by order of the commissioner of revenue, the reduction shall 
be applied to the original assessed value of the district when 
the property upon which the abatement is made has not been 
improved since the date of certification of the district and to 
the captured assessed value of the district in each year 
thereafter when the abatement relates to improvements made after 
the date of certification.  The county auditor may specify 
reasonable form and content of the request for certification of 
the authority and any modification thereof pursuant to section 
176, subdivision 4. 
    Subd. 2.  [CAPTURED ASSESSED VALUE.] The county auditor 
shall certify the amount of the captured assessed value to the 
authority each year, together with the proportion that the 
captured assessed value bears to the total assessed value of the 
real property within the tax increment financing district for 
that year. 
    (a) An authority may choose to retain any part or all of 
the captured assessed value for purposes of tax increment 
financing according to one of the following options: 
    (1) If the plan provides that all the captured assessed 
value is necessary to finance or otherwise make permissible 
expenditures under section 177, subdivision 4, the authority may 
retain the full captured assessed value. 
    (2) If the plan provides that only a portion of the 
captured assessed value is necessary to finance or otherwise 
make permissible expenditures under section 177, subdivision 4, 
only that portion shall be set aside and the remainder shall be 
distributed among the affected taxing districts by the county 
auditor. 
    (b) The portion of captured assessed value that an 
authority intends to use for purposes of tax increment financing 
must be clearly stated in the tax increment financing plan. 
    Subd. 3.  [TAX INCREMENT, RELATIONSHIP TO CHAPTER 473F.] 
(a) Unless the governing body elects pursuant to clause (b) the 
following method of computation shall apply: 
    (1) The original assessed value and the current assessed 
value shall be determined before the application of the fiscal 
disparity provisions of chapter 473F.  Where the original 
assessed value is equal to or greater than the current assessed 
value, there is no captured assessed value and no tax increment 
determination.  Where the original assessed value is less than 
the current assessed value, the difference between the original 
assessed value and the current assessed value is the captured 
assessed value.  This amount less any portion thereof which the 
authority has designated, in its tax increment financing plan, 
to share with the local taxing districts is the retained 
captured assessed value of the authority.  
    (2) The county auditor shall exclude the retained captured 
assessed value of the authority from the taxable value of the 
local taxing districts in determining local taxing district mill 
rates.  The mill rates so determined are to be extended against 
the retained captured assessed value of the authority as well as 
the taxable value of the local taxing districts.  The tax 
generated by the extension of the local taxing district mill 
rates to the retained captured assessed value of the authority 
is the tax increment of the authority.  
    (b) The governing body may, by resolution approving the tax 
increment financing plan pursuant to section 176, subdivision 3, 
elect the following method of computation: 
    (1) The original assessed value shall be determined before 
the application of the fiscal disparity provisions of chapter 
473F.  The current assessed value shall exclude any fiscal 
disparity commercial-industrial assessed value increase between 
the original year and the current year multiplied by the fiscal 
disparity ratio determined pursuant to section 473F.08, 
subdivision 6.  Where the original assessed value is equal to or 
greater than the current assessed value, there is no captured 
assessed value and no tax increment determination.  Where the 
original assessed value is less than the current assessed value, 
the difference between the original assessed value and the 
current assessed value is the captured assessed value.  This 
amount less any portion thereof which the authority has 
designated, in its tax increment financing plan, to share with 
the local taxing districts is the retained captured assessed 
value of the authority.  
    (2) The county auditor shall exclude the retained captured 
assessed value of the authority from the taxable value of the 
local taxing districts in determining local taxing district mill 
rates.  The mill rates so determined are to be extended against 
the retained captured assessed value of the authority as well as 
the taxable value of the local taxing districts.  The tax 
generated by the extension of the local taxing district mill 
rates to the retained captured assessed value of the authority 
is the tax increment of the authority.  
    (3) An election by the governing body pursuant to part (b) 
shall be submitted to the county auditor by the authority at the 
time of the request for certification pursuant to subdivision 1. 
    (c) The method of computation of tax increment applied to a 
district pursuant to clause (a) or (b) shall remain the same for 
the duration of the district. 
    Subd. 4.  [PRIOR PLANNED IMPROVEMENTS.] The authority 
shall, after diligent search, accompany its request for 
certification to the county auditor pursuant to subdivision 1, 
or its notice of district enlargement pursuant to section 176, 
subdivision 4, with a listing of all properties within the tax 
increment financing district or area of enlargement for which 
building permits have been issued during the 18 months 
immediately preceding approval of the tax increment financing 
plan by the municipality pursuant to section 176, subdivision 
3.  The county auditor shall increase the original assessed 
value of the district by the assessed valuation of the 
improvements for which the building permit was issued, excluding 
the assessed valuation of improvements for which a building 
permit was issued during the three month period immediately 
preceding said approval of the tax increment financing plan, as 
certified by the assessor. 
    Subd. 5.  [TAX INCREMENT ACCOUNT.] The tax increment 
received with respect to any district shall be segregated by the 
authority in a special account or accounts on its official books 
and records or as otherwise established by resolution of the 
authority to be held by a trustee or trustees for the benefit of 
holders of the bonds.  
    Subd. 6.  [REQUEST FOR CERTIFICATION OF NEW TAX INCREMENT 
FINANCING DISTRICT.] A request for certification of a new tax 
increment financing district pursuant to subdivision 1 or of a 
modification to an existing tax increment financing district 
pursuant to section 176, subdivision 4, received by the county 
auditor on or before October 10 of the calendar year shall be 
recognized by the county auditor in determining mill rates for 
the current and subsequent levy years.  Requests received by the 
county auditor after October 10 of the calendar year shall not 
be recognized by the county auditor in determining mill rates 
for the current levy year but shall be recognized by the county 
auditor in determining mill rates for subsequent levy years.  
    Subd. 7.  [PROPERTY CLASSIFICATION CHANGES.] When any law 
governing the classification of real property and determining 
the percentage of market value to be assessed for ad valorem 
taxation purposes is amended, the increase or decrease in 
assessed valuation resulting therefrom shall be applied 
proportionately to original assessed value and captured assessed 
value of any tax increment financing district in each year 
thereafter.  This subdivision applies to tax increment districts 
created pursuant to sections 175 to 179 or any prior tax 
increment law.  
    Subd. 8.  [ASSESSMENT AGREEMENTS.] An authority may, upon 
entering into a development or redevelopment agreement pursuant 
to section 177, subdivision 5, enter into a written assessment 
agreement in recordable form with the developer or redeveloper 
of property within the tax increment financing district which 
establishes a minimum market value of the land and completed 
improvements to be constructed thereon until a specified 
termination date, which date shall be not later than the date 
upon which tax increment will no longer be remitted to the 
authority pursuant to section 177, subdivision 1.  The 
assessment agreement shall be presented to the county assessor, 
or city assessor having the powers of the county assessor, of 
the jurisdiction in which the tax increment financing district 
is located.  The assessor shall review the plans and 
specifications for the improvements to be constructed, review 
the market value previously assigned to the land upon which the 
improvements are to be constructed and, so long as the minimum 
market value contained in the assessment agreement appears, in 
the judgment of the assessor, to be a reasonable estimate, shall 
execute the following certification upon the agreement:  
     The undersigned assessor, being legally responsible 
     for the assessment of the above described property 
     upon completion of the improvements to be 
     constructed thereon, hereby certifies that the market 
     value assigned to      the land and improvements upon 
     completion shall not be less than $........... .  
    Upon transfer of title of the land to be developed or 
redeveloped from the authority to the developer or redeveloper, 
the assessment agreement, together with a copy of this 
subdivision, shall be filed for record and recorded in the 
office of the county recorder or filed in the office of the 
registrar of titles of the county where the real estate or any 
part thereof is situated.  Upon completion of the improvements 
by the developer or redeveloper, the assessor shall value the 
property pursuant to section 273.11, except that the market 
value assigned thereto shall not be less than the minimum market 
value contained in the assessment agreement.  Nothing herein 
shall limit the discretion of the assessor to assign a market 
value to the property in excess of the minimum market value 
contained in the assessment agreement nor prohibit the developer 
or redeveloper from seeking, through the exercise of 
administrative and legal remedies, a reduction in market value 
for property tax purposes; provided, however, that the developer 
or redeveloper shall not seek, nor shall the city assessor, the 
county assessor, the county auditor, any board of review, any 
board of equalization, the commissioner of revenue or any court 
of this state grant a reduction of the market value below the 
minimum market value contained in the assessment agreement 
during the term of the agreement filed of record regardless of 
actual market values which may result from incomplete 
construction of improvements, destruction or diminution by any 
cause, insured or uninsured, except in the case of acquisition 
or reacquisition of the property by a public entity.  Recording 
or filing of an assessment agreement complying with the terms of 
this subdivision shall constitute notice of the agreement to any 
subsequent purchaser or encumbrancer of the land or any part 
thereof, whether voluntary or involuntary, and shall be binding 
upon them.  
    Sec. 179.  [469.178] [TAX INCREMENT BONDING.] 
    Subdivision 1.  [GENERALLY.] Notwithstanding any other law, 
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 except as authorized in this 
section.  The proceeds from the bonds shall be used only in 
accordance with section 177, subdivision 4 as if the 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 laws not requiring a tax increment financing plan.  The bonds 
are not included for purposes of computing the net debt of any 
municipality. 
    Subd. 2.  [MUNICIPALITY'S GENERAL OBLIGATION BONDS.] 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 177, 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 shall file the resolution containing the 
covenant with the county auditor.  When tax increment, 
assessments and other revenues are pledged, the estimated 
collections of the tax increment, assessments and 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. 
    Subd. 3.  [AUTHORITY'S GENERAL OBLIGATION BONDS.] 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 177, subdivision 4.  The bonds 
of the authority shall be authorized by its resolution and shall 
mature as determined by resolution of the authority in 
accordance with sections 175 to 179.  The bonds may be issued in 
one or more series and shall bear the date or dates, bear 
interest at the rate or rates, be in the denomination or 
denominations, be in the form, either coupon or registered, 
carry the conversion or registration privileges, have the rank 
or priority, be executed in the manner, be payable in medium of 
payment at the place or places, and be subject to the terms of 
redemption, with or without premium, as the resolution, its 
trust indenture or mortgage may provide.  The bonds may be sold 
at public or private sale at the price or prices the authority 
by resolution shall determine.  Notwithstanding any provision of 
law to the contrary, the bonds shall be fully negotiable.  In 
any suit 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 that 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 sections 175 to 
179.  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 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 shall the 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; the bonds shall state this on their 
face. 
    Subd. 4.  [AUTHORITY'S REVENUE BONDS.] Notwithstanding any 
other law, an authority may, by resolution, authorize, issue and 
sell revenue bonds payable solely from all or a portion of 
revenues, including tax increment revenues and assessments, 
derived from a tax increment financing district located wholly 
or partially within the municipality to finance any expenditure 
that the authority is authorized to make by section 177, 
subdivision 4.  The bonds shall mature as determined by 
resolution of the authority in accordance with sections 175 to 
179 and may be issued in one or more series.  The bonds shall 
bear the date or dates, bear interest at the rate or rates, be 
in the denomination or denominations, be in the form, either 
coupon or registered, carry the conversion or registration 
privileges, have the rank or priority, be executed in the 
manner, be payable in medium of payment at the place or places, 
and be subject to the terms of redemption, with or without 
premium, as the resolution, its trust indenture or mortgage may 
provide.  The bonds may be sold at public or private sale at the 
price or prices the authority by resolution determines, and any 
provision of any law to the contrary notwithstanding, shall be 
fully negotiable.  In any suit 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 that 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 sections 
175 to 179.  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 their issuance.  
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 by convenants the authority deems by resolution to be 
necessary and proper to secure payment of the bonds.  The bonds 
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 sections 175 
to 179 and pledged hereunder, to pay the principal of or 
interest on the 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; the 
bonds shall state this on their face. 
    Subd. 5.  [TEMPORARY BONDS.] (a) In anticipation of the 
issuance of bonds pursuant to subdivision 2, 3, or 4, the 
authority or municipality may by resolution issue and sell 
temporary bonds pursuant to subdivision 2, 3, or 4, maturing 
within 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 that 
the authority or municipality offers 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 subdivision 2, 3, or 4 without regard to whether the 
temporary bonds were issued pursuant to subdivision 2, 3, or 4.  
If general obligation temporary bonds are issued pursuant to 
subdivision 2, 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 that the 
authority or municipality issue pursuant to subdivision 2, 3, or 
4 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.  The authority or 
municipality shall do so upon demand.  
    (b) 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.  
    Subd. 6.  [FEDERAL VOLUME LIMITATIONS.] Sections 474A.01 to 
474A.21 apply to any issuance of obligations under this section 
that are subject to limitation under a federal volume limitation 
act as defined in section 474A.02, subdivision 9, or existing 
federal tax law as defined in section 474A.02, subdivision 8. 
    Sec. 180.  [469.179] [EXISTING PROJECTS.] 
    The provisions of sections 175 to 179 shall not affect any 
project for which tax increment certification was requested 
pursuant to law prior to August 1, 1979, or any project carried 
on by an authority pursuant to section 33, subdivision 5 with 
respect to which the governing body has by resolution designated 
properties for inclusion in the district prior to August 1, 
1979, except: 
    (1) as otherwise expressly provided in sections 175 to 179; 
or 
    (2) as an authority elects to proceed with an existing 
district, under the provisions of sections 175 to 179; or 
    (3) that any enlargements of the geographic area of an 
existing tax increment financing district subsequent to August 
1, 1979, shall be accomplished in accordance with and shall 
subject the property added as a result of the enlargement to the 
terms and conditions of sections 175 to 179; or 
    (4) that beginning with taxes payable in 1980, section 178, 
subdivision 3, clause (b), shall apply to all development 
districts created pursuant to Minnesota Statutes 1978, chapter 
472A, or any special law, prior to August 1, 1979. 

               MISCELLANEOUS ECONOMIC DEVELOPMENT POWERS 
    Sec. 181.  [469.180] [ECONOMIC DEVELOPMENT AGREEMENTS WITH 
SUBDIVISIONS AND CORPORATIONS OF OTHER STATES.] 
    Subdivision 1.  [AGREEMENTS AUTHORIZED.] A county or two or 
more adjacent counties may make an agreement with contiguous 
political subdivisions of an adjacent state, with nonprofit 
corporations, or both, to improve the economic development of 
the area.  
    Subd. 2.  [TAX LEVIES.] Notwithstanding any law, the county 
board of any county may appropriate from the general revenue 
fund a sum not to exceed 1/30 of a mill on the taxable valuation 
of the county to carry out the purposes of this section.  
    Sec. 182.  [469.181] [DEFERRED PROPERTY TAXATION FOR 
PRIVATE REDEVELOPMENT.] 
    Subdivision 1.  [APPLICATION.] A developer proposing to 
construct improvements on property located within an industrial 
development district as defined in section 59, subdivision 1; an 
economic development district as defined in section 102, 
subdivision 1; a development district as defined in section 126, 
subdivision 8, or any special law; or a redevelopment project as 
defined in section 2, subdivision 12 may apply to the governing 
body of the city or municipality in which the property is 
located to obtain deferral of property tax on the improved 
property, stating the nature and location of the proposed 
improvement, its estimated cost, and the projected length of 
construction time.  If the governing body finds that the 
proposed development is consistent with the requirements of the 
above referred sections, it may approve the application.  If the 
application is approved by June 30, the tax exemption shall be 
in effect for taxes paid the following year; if it is approved 
later than June 30, the exemption shall be in effect for taxes 
paid in the second subsequent year.  
    Subd. 2.  [TAX TREATMENT.] Property approved for the tax 
deferral provided in this section shall be exempt from taxation 
during the time while the improvements proposed in the plan are 
under construction.  The exemption shall be in effect for the 
number of taxable years approved by the governing body at the 
time of approval of the application.  The period of deferral 
shall not exceed the length of the construction period projected 
in the plan.  For taxes payable in the first year following the 
levy year during which 50 percent of the area of the building 
becomes occupied, the tax due on the property shall be the sum 
of: 
    (1) the amount of tax paid on the property in the year in 
which the developer applied for the deferral, multiplied by the 
number of years during which the property was exempt from 
taxation pursuant to this section; plus 
    (2) the amount of taxes which would ordinarily be due in 
the first year following the levy year during which 50 percent 
of the area of the building becomes occupied; plus 
    (3) at the option of the governing body, the amount of 
increased taxes that would have been due and payable each year 
during the period of deferral.  
    If the improvements that had been present on the property 
were demolished prior to the year of the application, the 
governing body may require that the deferred tax be computed 
based on the amount of tax due on the property for the last 
taxable year preceding the demolition of the improvement.  For 
all subsequent taxable years, the property shall be assessed as 
provided in section 273.11.  
    Subd. 3.  [TRANSFERABILITY.] When ownership of property 
that has been approved for the tax deferral provided in this 
section is transferred from the original applicant, the 
governing body may elect to continue to defer the tax on the 
property if the subsequent owner agrees to redevelop the 
property according to either (1) the original redevelopment plan 
approved under subdivision 1 or (2) a plan proposed by the 
subsequent owner and approved by the governing body.  
    Subd. 4.  [EXCEPTIONS.] The provisions of this section do 
not apply to any property purchased from an authority that 
acquired the property with tax increment or bonds issued 
pursuant to section 179. 
    Sec. 183.  [469.182] [EMPLOYMENT BUREAUS; FIRST CLASS 
CITIES.] 
    Any city of the first class may establish and conduct an 
employment bureau, and provide for its regulation and 
maintenance by the city.  
    Sec. 184.  [469.183] [BONDS FOR MUNICIPAL MARKET; FIRST 
CLASS CITIES.] 
    Subdivision 1.  [ISSUANCE.] The governing body of any city 
of the first class that owns, maintains, and operates its own 
municipal market may issue negotiable bonds in an amount in the 
aggregate not exceeding $200,000.  These bonds shall be in the 
denominations and payable at the places and at the times, not 
exceeding 30 years from the date of issuance, as deemed best by 
the governing body of the city.  The bonds shall be in serial 
form and bear interest at a rate not to exceed six percent per 
annum, payable semiannually, at the place designated therein.  
The governing body may negotiate and sell the bonds from time to 
time to the highest bidder or bidders, and upon the best terms 
that can be obtained, provided that no such bonds shall be sold 
for less than the par value thereof and accrued interest thereon.
    Subd. 2.  [LIMITATIONS NOT TO APPLY.] The bonds authorized 
by subdivision 1, or any portion thereof, may be issued and sold 
by any such city notwithstanding any limitation contained in the 
charter of the city or in any law prescribing or fixing any 
limit upon the bonded indebtedness of the city.  The governing 
body of a city issuing these bonds shall set aside annually from 
the revenues of the operation of projects for which the bond 
issue is authorized, a sufficient amount to pay the interest on 
the bonds and the principal of any such bonds maturing in any 
year.  In the event that revenue is insufficient for this 
purpose, the governing body of the city shall include in the tax 
levy a sufficient amount for the payment of the interest as it 
accrues and for the accumulation of a sinking fund for the 
redemption of the bonds at their maturity.  
    Subd. 3.  [USE OF PROCEEDS.] The proceeds of any bonds 
issued or sold under the authority of this section shall be used 
for the purchase or condemnation of a site or sites for the 
expansion, improvement and equipment of the municipal market, 
owned, maintained, and operated by the city; provided, that no 
bonds in excess of $200,000 shall be issued for those purposes.  
    Subd. 4.  [ADDITIONAL POWERS.] The authority granted in 
this section is in addition to all existing power and authority 
of any city operating under a home rule charter adopted in 
pursuance of the Constitution of the state of Minnesota, article 
IV, section 36. 
    Sec. 185.  [469.184] [PROGRAMS FOR MUNICIPAL COMMERCIAL 
REHABILITATION LOANS.] 
    Subdivision 1.  [PURPOSE.] The legislature finds that in 
many cities within the state there are small and medium sized 
commercial buildings which are physically deteriorating and in 
need of rehabilitation; that there is a need for city programs 
for the rehabilitation of these commercial buildings; that some 
owners of small and medium sized commercial buildings are unable 
to afford rehabilitation loans in the private mortgage market 
and that the health, safety and general welfare and the 
preservation of the quality of life of the residents of 
Minnesota cities are dependent upon the preservation and 
rehabilitation of these commercial buildings.  
    Subd. 2.  [FINDINGS REQUIRED.] To accomplish the purposes 
specified in subdivision 1, the governing body of any home rule 
charter or statutory city may, by ordinance, establish and 
provide for the administration of a commercial building loan 
program to rehabilitate and preserve small and medium sized 
commercial buildings located within its boundaries, upon making 
the following findings:  
    (1) that commercial buildings in the city are physically 
deteriorating, underused, economically inefficient or 
functionally obsolete, and in need of rehabilitation to meet 
applicable building codes;  
    (2) that there is a need for a comprehensive program for 
the rehabilitation of the buildings to prevent economic and 
physical blight and deterioration, to increase the municipal tax 
base, and, if the city has adopted a comprehensive plan, to 
assist in the implementation of the comprehensive plan of the 
municipality;  
    (3) that some owners of small and medium sized commercial 
buildings in the city are unable to afford rehabilitation loans 
on terms available in the private mortgage market or to obtain 
rehabilitation loans on any terms because the private mortgage 
market is severely restricted; and 
    (4) that the health, safety and general welfare and the 
preservation of the quality of life of the residents of the city 
are dependent upon the preservation and rehabilitation of the 
small and medium sized commercial buildings.  
    Subd. 3.  [PROGRAM.] The program may include provisions for 
loans for rehabilitation and preservation purposes, secured by 
mortgages on the property with respect to which the loans are 
made, or by other security acceptable to the governing body of 
the city.  Except as hereinafter provided, the loans may be made 
on terms and conditions as authorized in the program.  In 
approving applications for loans from a program, the following 
factors shall be considered:  
    (1) the availability and affordability of private mortgage 
credit;  
    (2) the availability and affordability of other 
governmental programs;  
    (3) whether the building is required, pursuant to any court 
order, statute or ordinance, to be repaired, improved or 
rehabilitated; and 
    (4) whether the proposed improvements will result in 
conformance with building and zoning codes and improvement of 
the aesthetic quality of existing commercial areas.  
    Subd. 4.  [LIMITATIONS.] A loan program shall be operated 
within the following limitations:  
    (1) the terms and conditions of all loans made under the 
program shall be fixed so that the sum of all repayments of 
principal and interest on them, not then delinquent, and all 
fees and charges collected, together with other sums to be 
contributed by the city, shall, over the duration of the 
program, be estimated to be equal to or greater than the sum of 
all estimated costs of the program, as determined by the program 
administrator and approved by the governing body of the city, 
including administrative costs, mortgage foreclosure costs, and 
principal and interest payments on bonds issued to finance the 
program to the extent not paid from bond proceeds;  
    (2) no loan shall be made for a period exceeding 20 years;  
    (3) no loan shall exceed 80 percent of the estimated market 
value of the property to be rehabilitated upon completion of the 
rehabilitation, less the principal balance of any prior mortgage 
existing on the property at the time the loan is made; and 
    (4) no loan shall be made in excess of $200,000 for the 
rehabilitation of any particular small or medium sized 
commercial building.  
    Subd. 5.  [GRANT PROHIBITION.] A program authorized by this 
section does not include the making of grants.  
    Subd. 6.  [ADMINISTRATION.] The municipality may administer 
the program directly or may contract with any qualified public 
or private nonprofit agency or enterprise for some or all of the 
services required.  The ordinance establishing the program shall 
provide for the adoption of program regulations which shall 
include a definition of "small and medium sized commercial 
buildings", loan eligibility and loan priority criteria, loan 
amount limitations and other provisions as deemed necessary.  
    Subd. 7.  [HOUSING AND REDEVELOPMENT AUTHORITY AS AGENT.] A 
housing and redevelopment authority of a city or county may 
exercise any or all of the powers conferred by this section on 
behalf of a city, if the city by ordinance authorizes it.  
    Subd. 8.  [REVENUE BONDS.] Notwithstanding any contrary 
provision of other law or charter, the governing body of any 
city operating a program under this section may, by resolution, 
authorize, issue and sell revenue bonds or obligations payable 
solely from all or a portion of the revenues derived from or 
other contributions to the program.  The bonds or obligations 
shall mature as determined by resolution of the governing body 
of the city in accordance with the limitations of subdivision 4. 
    The bonds or obligations may be issued in one or more 
series, bear a date or dates, bear interest at a rate or rates, 
be in the denomination or denominations, be either coupon or 
registered, carry conversion or registration privileges, have 
rank or priority, be executed in the manner, be payable at the 
place or places, and be subject to the terms of redemption, with 
or without premium, as the resolution, its trust indenture or 
mortgage may provide.  The bonds or obligations may be sold at 
public or private sale at the price or prices the governing body 
of the city by resolution determines, and notwithstanding any 
contrary provision of law, shall be fully negotiable.  In any 
suit, action, or proceedings involving the validity or 
enforceability of any bonds or obligations of the city or their 
security, any bond reciting in substance that it has been issued 
by the city to aid in financing a commercial rehabilitation loan 
program shall be conclusively deemed to have been issued for 
that purpose, and the program shall be conclusively deemed to 
have been authorized, established and carried out in accordance 
with the purposes and provisions of this section.  Neither the 
city nor any council member, board member, director, 
commissioner, officer, employee or agent of the governing body 
of the city nor any person executing the bonds shall be liable 
personally on the bonds by reason of their issuance.  The bonds 
or obligations may be further secured by a pledge or mortgage on 
the property with respect to which loans are made and in aid of 
which the bonds are issued and by covenants as the governing 
body of the city shall deem by resolution to be necessary and 
proper to secure payment of the bonds.  The bonds or 
obligations, and they shall so state on their face, shall not be 
payable from nor charged upon any funds other than the revenues 
and properties pledged or mortgaged to their payment, nor shall 
the issuing city be subject to any liability on them 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 of the bonds or obligations shall ever have the right 
to compel any exercise of any taxing power of the issuing city 
or any other public body to pay the principal of or interest on 
the bonds or obligations, nor to enforce payment of them against 
any property of the city or other public body other than that 
expressly pledged or mortgaged for their payment.  
    Subd. 9.  [USE OF BOND PROCEEDS.] The proceeds of the 
revenue bonds or obligations may be used 
    (1) to make loans in accordance with a program, 
    (2) to establish a fund from which loans may be made in 
accordance with a program, 
    (3) to establish reserves for the payment of the bonds and 
interest on them, 
    (4) to pay all of the interest coming due on the bonds 
until the money derived from loan repayments is sufficient for 
the purpose, and 
    (5) to pay costs of issuance.  
    Subd. 10.  [SECURITY FOR BONDS.] The city may pledge any 
mortgages securing loans made under the program and all 
principal and interest payments to be received under them to the 
payment of revenue bonds or obligations issued under this 
section, may make other covenants with respect to them, future 
mortgages or other matters as deemed necessary for the security 
of the revenue bonds or obligations, and may assign all of its 
rights under the mortgages to a trustee for bond holders and 
enter into an indenture of trust for this purpose, containing 
other terms and provisions and conferring powers on the trustee 
as considered necessary for the security of the bonds or 
obligations.  
    Subd. 11.  [ADDITIONAL SECURITY FOR BONDS.] The governing 
body of the city shall not amend the regulations adopted by 
ordinance and in effect at the time any bonds or obligations 
authorized by this section are issued, to the detriment of the 
holder of the bonds or obligations.  
    Sec. 186.  [469.185] [CONVEYANCE OF LANDS TO PROMOTE 
INDUSTRY AND EMPLOYMENT.] 
    Any municipality owning lands in fee simple and not 
restricted by the grant, may convey the lands for a nominal 
consideration to encourage and promote industry and provide 
employment for citizens.  
    Sec. 187.  [469.186] [BUREAU OF INFORMATION AND PUBLICITY; 
STATUTORY CITIES.] 
    The council of any statutory city may establish and 
maintain a bureau of information and publicity for the purpose 
of furnishing tourists information and for outdoor advertising 
and for preparing, publishing, and circulating information and 
facts concerning the recreational facilities and business and 
industrial conditions of the community. 
    Sec. 188.  [469.187] [EXPENDITURE FOR PUBLICITY; PUBLICITY 
BOARD; FIRST CLASS CITIES.] 
    Any city of the first class may expend money for city 
publicity purposes.  The city may levy a tax, at a rate not 
exceeding one-thirtieth of one mill upon the assessed valuation 
of the taxable property of the city.  The proceeds of the levy 
shall be expended in the manner and for the city publicity 
purposes the council directs.  The council may establish and 
provide for a publicity board or bureau to administer the fund, 
subject to the conditions and limitations the council prescribes 
by ordinance.  
    Sec. 189.  [469.188] [TAX FOR ADVERTISING RESOURCES; CITIES 
OF SECOND OR THIRD CLASS.] 
    The governing body of any city of the second or third class 
in this state may levy a tax of not to exceed one-third of one 
mill against the taxable property in the city for the purpose of 
advertising agricultural, industrial business, and all other 
resources of the community subject to the city's levy limits.  
    Sec. 190.  [469.189] [ APPROPRIATION FOR ADVERTISING 
PURPOSES; STATUTORY AND FOURTH CLASS CITIES.] 
    The governing body of any statutory city or home rule 
charter city of the fourth class may annually appropriate money 
to advertise the municipality and its resources and advantages.  
The money appropriated shall be used only to advertise the 
municipality or for cooperative programs of promotion for the 
area by more than one municipality and its resources and 
advantages.  
    Sec. 191.  [469.190] [LOCAL LODGING TAX.] 
    Subdivision 1.  [AUTHORIZATION.] Notwithstanding section 
477A.016 or any other law, a statutory or home rule charter city 
may by ordinance, and a town may by vote at its annual meeting, 
impose a tax of up to three percent on the gross receipts from 
the furnishing for consideration of lodging at a hotel, motel, 
rooming house, tourist court, or resort, other than the renting 
or leasing of it for a continuous period of 30 days or more.  A 
statutory or home rule charter city may by ordinance impose the 
tax authorized under this subdivision on the camping site 
receipts of a municipal campground.  
    Subd. 2.  [EXISTING TAXES.] No statutory or home rule 
charter city or town may impose a tax under this section upon 
transient lodging that, when combined with any tax authorized by 
special law or enacted prior to 1972, exceeds a rate of three 
percent.  
    Subd. 3.  [DISPOSITION OF PROCEEDS.] Ninety-five percent of 
the gross proceeds from any tax imposed under subdivision 1 
shall be used by the statutory or home rule charter city or town 
to fund a local convention or tourism bureau for the purpose of 
marketing and promoting the city or town as a tourist or 
convention center.  This subdivision shall not apply to any 
statutory or home rule charter city or town that has a lodging 
tax authorized by special law or enacted prior to 1972 at the 
time of enactment of this section.  
    Subd. 4.  [UNORGANIZED TERRITORIES.] A county board acting 
as a town board with respect to an unorganized territory may 
impose a lodging tax within the unorganized territory according 
to this section if it determines by resolution that imposition 
of the tax is in the public interest. 
    Subd. 5.  [REVERSE REFERENDUM.] If the county board passes 
a resolution under subdivision 4 to impose the tax, the 
resolution must be published for two successive weeks in a 
newspaper of general circulation within the unorganized 
territory, together with a notice fixing a date for a public 
hearing on the proposed tax. 
    The hearing must be held not less than two weeks nor more 
than four weeks after the first publication of the notice.  
After the public hearing, the county board may determine to take 
no further action, or may adopt a resolution authorizing the tax 
as originally proposed or approving a lesser rate of tax.  The 
resolution must be published in a newspaper of general 
circulation within the unorganized territory.  The voters of the 
unorganized territory may request a referendum on the proposed 
tax by filing a petition with the county auditor within 30 days 
after the resolution is published.  The petition must be signed 
by voters who reside in the unorganized territory.  The number 
of signatures must equal at least five percent of the number of 
persons voting in the unorganized territory in the last general 
election.  If such a petition is timely filed, the resolution is 
not effective until it has been submitted to the voters residing 
in the unorganized territory at a general or special election 
and a majority of votes cast on the question of approving the 
resolution are in the affirmative.  The commissioner of revenue 
shall prepare a suggested form of question to be presented at 
the referendum.  
    Subd. 6.  [JOINT POWERS AGREEMENTS.] Any statutory or home 
rule charter city, town, or county when the county board is 
acting as a town board with respect to an unorganized territory, 
may enter into a joint exercise of powers agreement pursuant to 
section 471.59 for the purpose of imposing the tax and disposing 
of its proceeds pursuant to this section. 
    Subd. 7.  [COLLECTION.] The statutory or home rule charter 
city may agree with the commissioner of revenue that a tax 
imposed pursuant to this section shall be collected by the 
commissioner together with the tax imposed by chapter 297A, and 
subject to the same interest, penalties and other rules and that 
its proceeds, less the cost of collection, shall be remitted to 
the city. 
    Sec. 192.  Minnesota Statutes 1986, section 16B.61, 
subdivision 3, is amended to read:  
    Subd. 3.  [SPECIAL REQUIREMENTS.] (a)  [SPACE FOR COMMUTER 
VANS.] The code must require that any parking ramp or other 
parking facility constructed in accordance with the code include 
an appropriate number of spaces suitable for the parking of 
motor vehicles having a capacity of seven to 16 persons and 
which are principally used to provide prearranged commuter 
transportation of employees to or from their place of employment 
or to or from a transit stop authorized by a local transit 
authority.  
    (b)  [SMOKE DETECTION DEVICES.] The code must require that 
all dwellings, lodging houses, apartment houses, and hotels as 
defined in section 299F.362 comply with the provisions of 
section 299F.362.  
    (c)  [DOORS IN NURSING HOMES AND HOSPITALS.] The state 
building code may not require that each door entering a sleeping 
or patient's room from a corridor in a nursing home or hospital 
with an approved complete standard automatic fire extinguishing 
system be constructed or maintained as self-closing or 
automatically closing.  
    (d) A licensed day care center serving fewer than 30 
preschool age persons and which is located in a below ground 
space in a church building is exempt from the state building 
code requirement for a ground level exit when the center has 
more than two stairways to the ground level and its exit.  
    (e)  [MINED UNDERGROUND SPACE.] Nothing in the state 
building codes shall prevent cities from adopting rules 
governing the excavation, construction, reconstruction, 
alteration and repair of mined underground space pursuant to 
sections 472B.03 136 to 472B.07 142, or of associated facilities 
in the space once the space has been created, provided the 
intent of the building code to establish reasonable safeguards 
for health, safety, welfare, comfort, and security is maintained.
    (f) No provision of the code or any appendix chapter of the 
code may require stairways of existing multiple dwelling 
buildings of two stories or less to be enclosed.  
    Sec. 193.  Minnesota Statutes 1986, section 41A.05, 
subdivision 2, is amended to read:  
    Subd. 2.  [ISSUANCE OF BONDS.] (a) Subject to section 
16A.80, upon application pursuant to section 41A.04, the board 
by resolution may exercise the powers of a rural development 
authority under sections 362A.01 143 to 362A.05 152 and the 
powers of a municipality under chapter 474 sections 153 to 166 
for the purposes of providing money to pay the costs of a 
project, including the issuance of bonds and the loan of the 
bond proceeds pursuant to a lease or other agreement.  The bonds 
must be issued, sold, and secured on the terms and conditions 
and in the manner determined by resolution of the 
board.  Sections Section 16A.80 and 474.23 do does not apply to 
the bonds.  Notwithstanding subdivision 1, a reserve established 
for the bonds provided by the borrower, including out of bond 
proceeds, may be deposited and held in a separate account in the 
guaranty fund and applied to the last installments of principal 
or interest on the bonds, subject to the reserves being 
withdrawn for any purpose permitted by subdivision 1.  The board 
may by resolution or indenture pledge any or all amounts in the 
guaranty fund, including any reserves and investment income on 
amounts in the fund, to secure the payment of principal and 
interest on any or all series of bonds, upon the terms and 
conditions as provided in the resolution or indenture.  To the 
extent the board deems necessary or desirable to prevent 
interest on bonds from becoming subject to federal income 
taxation, (1) the amounts in the guaranty fund shall be invested 
in obligations or securities with restricted yields and (2) the 
investment income on the amounts are released from the pledge 
securing the bonds or loan guaranty and appropriately applied to 
prevent taxation. 
    (b) Bonds issued pursuant to this chapter are not general 
obligations of the state or the board.  The full faith and 
credit and taxing powers of the state and the board are not and 
may not be pledged for the payment of the bonds.  No person may 
compel the levy of a tax for the payment or compel the 
appropriation of money of the state or the board for the payment 
of the bonds, except as specifically provided in this chapter. 
    (c) The issuance of bonds pursuant to this subdivision is 
subject to sections 474.18 to 474.25 474A.11 and 474A.13.  For 
purposes of sections 474.16 to 474.20 474A.01 to 474A.21, the 
board is a local issuer and may apply for allocations of 
authority to issue private activity obligations and may enter 
into an agreement for the issuance of obligations by another 
issuer. 
    Sec. 194.  Minnesota Statutes 1986, section 41A.06, 
subdivision 5, is amended to read:  
    Subd. 5.  [PROPERTY TAX INCREMENTS.] If tax increment 
financing is to be used for the project, the applicant for a 
loan guaranty or bonds for any project, and the county in which 
the project is situated, shall do all acts and things necessary 
for the computation and segregation of property tax increments 
resulting from the construction of the project in accordance 
with the provisions of section 362A.05 150, and for the 
remittance to the commissioner of finance, for deposit in the 
loan guaranty fund, of all tax increments received from and 
after the date of the conditional commitment for the loan 
guaranty.  If the project account contains an amount equal to 
the average annual payment of principal and interest on the 
bonds or for the guaranteed portion of a guaranteed loan, the 
board must annually return the excess tax increment to be 
distributed as provided by section 273.75 177, subdivision 2, 
clause (d) (4), until the increment has been discharged under 
the agreement or section 362A.05 150.  
    Sec. 195.  Minnesota Statutes 1986, section 115A.69, 
subdivision 9, is amended to read:  
    Subd. 9.  [DISPOSITION OF PROPERTY.] The district may sell 
or otherwise dispose of any real or personal property acquired 
by it which is no longer required for accomplishment of its 
purposes.  The property shall be sold in the manner provided by 
section 458.196 66, insofar as practical.  The district shall 
give notice of sale which it deems appropriate.  When the 
district determines that any property which has been acquired 
from a government unit without compensation is no longer 
required, the district shall transfer it to the government unit. 
    Sec. 196.  Minnesota Statutes 1986, section 116J.27, 
subdivision 4, is amended to read:  
    Subd. 4.  [INSPECTIONS.] The commissioner shall conduct 
inspections on a random basis for compliance with the provisions 
of subdivision 3.  The commissioner may authorize a 
municipality, with its consent, to conduct the inspections 
within the municipality's jurisdiction, or to otherwise enforce 
the provisions of subdivision 3.  Any municipality which 
conducts an inspections or other enforcement program shall have 
authority under all subdivisions of section 116J.30 to enforce 
the provisions of subdivision 3; provided that 100 percent of 
the penalties for violation of subdivision 3 shall be paid to 
the municipality.  With respect to low-rent housing owned by a 
public housing authority or a housing and redevelopment 
authority described in chapter 462 sections 1 to 47, the 
commissioner or the municipality which conducts the inspection 
shall submit the results of the inspection to the housing and 
redevelopment authority or the public housing authority for 
review.  If the housing and redevelopment authority or the 
public housing authority does not concur in the findings of the 
commissioner or the municipality, then the housing and 
redevelopment authority or the public housing authority and the 
commissioner or the municipality shall select a mutually 
acceptable independent third party or panel of experts 
knowledgeable in the area of energy conservation.  The results 
of the inspection, the conclusions of the commissioner or the 
municipality as to compliance with the standards established 
pursuant to subdivision 1, and the basis for such conclusions, 
and the position of the housing and redevelopment authority or 
the public housing authority and the basis for such position 
shall be submitted to the independent third party or panel for a 
determination of the specific energy conservation measures which 
must be completed for compliance with the standards established 
pursuant to subdivision 1.  The costs of the independent third 
party or panel shall be paid equally by the housing and 
redevelopment authority or the public housing authority and the 
commissioner or the municipality.  
    Sec. 197.  Minnesota Statutes 1986, section 116M.03, 
subdivision 11, is amended to read:  
    Subd. 11.  [BUSINESS LOAN.] "Business loan" means a loan, 
other than a pollution control loan, energy loan, or farm loan, 
to a business for the financing of 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 474.02 154, subdivisions 1 
to 1f subdivision 2, paragraphs (a) to (g) and section 474.03 
156, subdivision 4. 
    Sec. 198.  Minnesota Statutes 1986, section 116M.03, 
subdivision 19, is amended to read:  
    Subd. 19.  [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 
154, subdivision 2, paragraphs (a) to (g) and section 474.03 
156, 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.  
    Sec. 199.  Minnesota Statutes 1986, section 116M.03, 
subdivision 28, is amended to read:  
    Subd. 28.  [QUALIFIED DIVERSIFICATION PROJECT.] A qualified 
economic diversification project means the provision of special 
assistance under section 116M.07, subdivision 11, paragraph (d) 
to a business, if the following criteria are satisfied. 
    (1) If the business is located outside of a distressed 
county, the following conditions must be satisfied:  
    (a) the business is principally engaged in manufacturing; 
    (b) the primary market for the product of the business is 
national or international in scope; 
    (c) the business would not locate or expand or continue to 
expand in Minnesota if special assistance were not provided; 
    (d) the project will result in the addition of at least 50 
permanent employees; 
    (e) the total capital investment for the project exceeds 
$3,000,000; 
    (f) the provision of special assistance to the business 
will result in diversification of the state's economy by 
expanding the types of products produced or technologies by 
establishing new markets for Minnesota products or technologies; 
and 
    (g) the project will not directly result in a reduction in 
the employment of other Minnesota businesses. 
    (2) If the business is located in a distressed county, the 
following conditions must be satisfied:  
    (a) The business is principally engaged in manufacturing or 
in selling of tangible personal property or services in response 
to orders received by mail or telephone or in providing business 
services by mail or electronic data transmission. 
    (b) The business would not locate in the distressed county 
or an adjacent Minnesota county if special assistance were not 
provided; 
    (c) The total capital investment for the project exceeds 
$3,000,000 and the business will increase employment by at least 
25 permanent positions or the total capital investment for the 
project exceeds $1,000,000 and the business will increase 
employment by at least 50 additional positions.  
    (d) For purposes of this subdivision, "manufacturing" has 
the meaning given in section 474.16 474A.02, subdivision 6 14, 
except that the provisions of clause (b) (2) do not apply. 
    Sec. 200.  Minnesota Statutes 1986, section 116M.06, 
subdivision 3, is amended to read:  
    Subd. 3.  [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) 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 4 169; 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 funds in a 
program that does not have financial participation from the 
private sector, as determined by the authority.  
    (c) The provisions of this subdivision do not apply to 
economic diversification projects. 
    Sec. 201.  Minnesota Statutes 1986, section 116M.07, 
subdivision 11, is amended to read:  
    Subd. 11.  [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 116M.08, subdivisions 11 and 12.  
Notwithstanding any provision to the contrary in section 
116M.08, 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 accounts 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 $25,000,000.  This 
authorization is in addition to the authorization contained in 
section 116M.08, subdivision 11. 
    (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 money in the economic development fund to 
provide financial assistance to businesses in accordance with 
section 116M.06, subdivision 2, except that section 116M.06, 
subdivision 2, clause (g), shall apply only to eligible small 
businesses. 
    (d) In the case of a qualified economic diversification 
project, special assistance may include, in addition: 
    (1) reimbursement of expenses paid or to be paid by the 
business for property or sales taxes for a period not to exceed 
five years; or 
    (2) use of money in the economic development fund to 
provide interest subsidy payments under section 116M.06, 
subdivision 2, clause (g) without regard to whether the business 
is an eligible small business. 
    In the case of an economic diversification project, the 
total amount of special assistance provided to a business may 
not exceed 20 percent of the total capital investment in the 
project.  If special assistance is provided for a project 
located in an enterprise zone, the sum of the amount of special 
assistance and the tax reductions provided under section 
273.1314, subdivision 9 172, subdivisions 1 to 8, may not exceed 
30 percent of the total capital investment in the project.  The 
amount of special assistance provided for an economic 
diversification project may not exceed $20,000 for each 
permanent job to be created by the project. 
    Sec. 202.  Minnesota Statutes 1986, section 124.214, 
subdivision 3, is amended to read:  
    Subd. 3.  [EXCESS TAX INCREMENT.] If a return of excess tax 
increment is made to a school district pursuant to section 
273.75 177, subdivision 2 or upon decertification of a tax 
increment district, the school district's aid entitlements and 
levy limitations must be adjusted for the fiscal year in which 
the excess tax increment is paid under the provisions of this 
subdivision. 
    (a) An amount must be subtracted from the school district's 
aid for the current fiscal year equal to the product of: 
    (1) the amount of the payment of excess tax increment to 
the school district, times 
    (2) the ratio of: 
    (A) the sum of the amounts of the school district's 
certified levy for the fiscal year in which the excess tax 
increment is paid according to the following: 
    (i) sections 124A.03, subdivision 1, 124A.06, subdivision 
3a, and 124A.08, subdivision 3a, if the school district is 
entitled to basic foundation aid according to section 124A.02; 
    (ii) sections 124A.10, subdivision 3a, and 124A.20, 
subdivision 2, if the school district is entitled to third-tier 
aid according to section 124A.10, subdivision 4; 
    (iii) sections 124A.12, subdivision 3a, and 124A.14, 
subdivision 5a, if the school district is eligible for 
fourth-tier aid according to section 124A.12, subdivision 4; 
    (iv) section 124A.03, subdivision 4, if the school district 
is entitled to summer school aid according to section 124.201; 
and 
    (v) section 275.125, subdivisions 5 and 5c, if the school 
district is entitled to transportation aid according to section 
124.225, subdivision 8a; 
    (B) to the total amount of the school district's certified 
levy for the fiscal year pursuant to sections 124A.03, 124A.06, 
subdivision 3a, 124A.08, subdivision 3a, 124A.10, subdivision 
3a, 124A.12, subdivision 3a, 124A.14, subdivision 5a, 124A.20, 
subdivision 2, and 275.125, plus or minus auditor's adjustments. 
    (b) An amount must be subtracted from the school district's 
levy limitation for the next levy certified equal to the 
difference between: 
    (1) the amount of the distribution of excess increment, and 
    (2) the amount subtracted from aid pursuant to clause (a). 
    If the aid and levy reductions required by this subdivision 
cannot be made to the aid for the fiscal year specified or to 
the levy specified, the reductions must be made from aid for 
subsequent fiscal years, and from subsequent levies.  The school 
district shall use the payment of excess tax increment to 
replace the aid and levy revenue reduced under this subdivision. 
    This subdivision applies only to the total amount of excess 
increments received by a school district for a calendar year 
that exceeds $25,000. 
    Sec. 203.  Minnesota Statutes 1986, section 216B.49, 
subdivision 7, is amended to read:  
    Subd. 7.  When a public utility is engaged in a project 
pursuant to chapter 474 sections 153 to 166, notwithstanding the 
provisions of section 474.03 156, funds or accounts established 
in connection with the project or payment of bonds issued for 
the project may also be invested in investments of the type 
authorized in section 11A.24, subdivisions 1 to 5.  
    Sec. 204.  Minnesota Statutes 1986, section 268.38, 
subdivision 3, is amended to read:  
    Subd. 3.  [ELIGIBLE RECIPIENTS.] A housing and 
redevelopment authority established under section 462.425 3 or a 
community action agency recognized under section 268.53 is 
eligible for assistance under the program.  In addition, a 
partnership, joint venture, corporation, or association that 
meets the following requirements is also eligible:  
    (1) it is established for a purpose not involving pecuniary 
gain to its members, partners, or shareholders;  
    (2) it does not pay dividends or other pecuniary 
remuneration, directly or indirectly, to its members, partners, 
or shareholders; and 
    (3) in the case of a private, nonprofit corporation, it is 
established under and in compliance with chapter 317.  
    Sec. 205.  Minnesota Statutes 1986, section 272.02, 
subdivision 5, is amended to read:  
    Subd. 5.  The holding of property by a political 
subdivision of the state for later resale for economic 
development purposes shall be considered a public purpose in 
accordance with subdivision 1, clause (7) for a period not to 
exceed eight years.  The holding of property by a political 
subdivision of the state for later resale (1) which is purchased 
or held for housing purposes, or (2) which meets the conditions 
described in section 273.73 175, subdivision 10, shall be 
considered a public purpose in accordance with subdivision 1, 
clause (7).  The governing body of the political subdivision 
which acquires property which is subject to this subdivision 
shall after the purchase of the property certify to the city or 
county assessor whether the property is held for economic 
development purposes or housing purposes, or whether it meets 
the conditions of section 273.73 175, subdivision 10.  If the 
property is acquired for economic development purposes and 
buildings or other improvements are constructed after 
acquisition of the property, and if more than one-half of the 
floor space of the buildings or improvements which is available 
for lease to or use by a private individual, corporation, or 
other entity is leased to or otherwise used by a private 
individual, corporation, or other entity the provisions of this 
subdivision shall not apply to the property.  This subdivision 
shall not create an exemption from section 272.01, subdivision 
2; 272.68; 273.19; or 462.575 40, subdivision 3; or other 
provision of law providing for the taxation of or for payments 
in lieu of taxes for publicly held property which is leased, 
loaned, or otherwise made available and used by a private person.
    Sec. 206.  Minnesota Statutes 1986, section 272.026, is 
amended to read:  
    272.026 [TAX STATUS OF PROPERTY MANAGED BY A HOUSING 
REDEVELOPMENT AUTHORITY OR PUBLIC HOUSING AGENCY.] 
    Any property that is under the direct management and 
control of, but is not owned by, a housing redevelopment 
authority or public housing agency, and is used in a manner 
authorized and contemplated by chapter 462 sections 1 to 47, and 
for which the authority or agency is eligible for assistance 
payments under federal law, is public property used for 
essential public and governmental purposes, and the property and 
the authority or agency is exempt from all taxes and special 
assessments of the city, the county, the state, or any political 
subdivision of the state in the same manner as property referred 
to in section 462.575 40, subdivision 1.  Payments in lieu of 
taxes for the property shall remain as provided in section 
272.68 or 462.575 40, subdivision 3. 
    Sec. 207.  Minnesota Statutes 1986, section 272.68, 
subdivision 4, is amended to read:  
    Subd. 4.  When the political subdivision is a housing and 
redevelopment authority which has obtained the right to take 
possession of a property in a redevelopment project area, it may 
lease the property to the previous occupant for temporary use 
pending the relocation of the former occupant's residence or 
business or may relocate such former occupant in any other 
property owned by it in such project area.  The authority may 
agree with the municipality to the payment of certain sums in 
lieu of taxes on said property during such temporary occupancy 
in which event the payment of the sum agreed upon shall be in 
lieu of taxes as provided in section 462.575 40 and the 
provisions of section 272.01, subdivision 2, and section 273.19 
shall not apply to such property or to the use thereof.  
    Sec. 208.  Minnesota Statutes 1986, section 273.13, 
subdivision 9, is amended to read:  
    Subd. 9.  [CLASS 4A, 4B, 4C, AND 4D.] (1) All property not 
included in the preceding classes shall constitute class 4a and 
shall be valued and assessed at 43 percent of the market value 
thereof, except as otherwise provided in this subdivision. 
    (2) Real property which is not improved with a structure 
and which is not utilized as part of a commercial or industrial 
activity shall constitute class 4b and shall be valued and 
assessed at 40 percent of market value.  
    (3) Commercial and industrial property, except as provided 
in this subdivision, shall constitute class 4c and shall be 
valued and assessed at 28 percent of the first $60,000 of market 
value and 43 percent of the remainder, provided that in the case 
of state-assessed commercial or industrial property owned by one 
person or entity, only one parcel shall qualify for the 28 
percent assessment, and in the case of other commercial or 
industrial property owned by one person or entity, only one 
parcel in each county shall qualify for the 28 percent 
assessment. 
    (4) Employment property defined in section 273.1313 167, 
during the period provided in section 273.1313 171, shall 
constitute class 4d and shall be valued and assessed at 20 
percent of the first $50,000 of market value and 21.5 percent of 
the remainder, except that for employment property located in an 
a border city enterprise zone designated pursuant to 
section 273.1312 169, subdivision 4, paragraph (c), clause (3), 
the first $60,000 of market value shall be valued and assessed 
at 28 percent and the remainder shall be assessed and valued at 
38.5 percent, unless the governing body of the city designated 
as an enterprise zone determines that a specific parcel shall be 
assessed pursuant to the first clause of this sentence.  The 
governing body may provide for assessment under the first clause 
of the preceding sentence only for property which is located in 
an area which has been designated by the governing body for the 
receipt of tax reductions authorized by section 273.1314 172, 
subdivision 9, paragraph (a) 1. 
    Sec. 209.  Minnesota Statutes 1986, section 273.13, 
subdivision 24, is amended to read:  
    Subd. 24.  [CLASS 3.] (a) Commercial and industrial 
property is class 3a.  It is assessed at 28 percent of the first 
$60,000 of market value and 43 percent for the market value over 
$60,000.  In the case of state-assessed commercial or industrial 
property owned by one person or entity, only one parcel may 
qualify for the 28 percent assessment.  In the case of other 
commercial or industrial property owned by one person or entity, 
only one parcel in each county may qualify for the 28 percent 
assessment. 
    (b) Employment property defined in section 273.1313 167, 
during the period provided in section 273.1313 171, shall 
constitute class 3b and shall be valued and assessed at 20 
percent of the first $50,000 of market value and 21.5 percent of 
the remainder, except that for employment property located in an 
a border city enterprise zone designated pursuant to 
section 273.1312 169, subdivision 4, paragraph (c), clause (3), 
the first $60,000 of market value shall be valued and assessed 
at 28 percent and the remainder shall be assessed and valued at 
38.5 percent, unless the governing body of the city designated 
as an enterprise zone determines that a specific parcel shall be 
assessed pursuant to the first clause of this sentence.  The 
governing body may provide for assessment under the first clause 
of the preceding sentence only for property which is located in 
an area which has been designated by the governing body for the 
receipt of tax reductions authorized by section 273.1314 172, 
subdivision 9, paragraph (a) 1. 
    (c) Real property which is not improved with a structure 
and which is not utilized as part of a commercial or industrial 
activity shall constitute class 3c and shall be valued and 
assessed at 40 percent of market value. 
    Sec. 210.  Minnesota Statutes 1986, section 273.1393, is 
amended to read:  
    273.1393 [COMPUTATION OF NET PROPERTY TAXES.] 
    Notwithstanding any other provisions to the contrary, "net" 
property taxes are determined by subtracting the credits in the 
order listed from the gross tax:  
    (1) disaster credit as provided in section 273.123;  
    (2) wetlands credit as provided in section 273.115;  
    (3) native prairie credit as provided in section 273.116;  
    (4) powerline credit as provided in section 273.42;  
    (5) agricultural preserves credit as provided in section 
473H.10; 
    (6) enterprise zone credit as provided in section 273.1314 
172; 
    (7) state school agricultural credit as provided in section 
124.2137; 
    (8) state paid homestead credit as provided in section 
273.13, subdivisions 22 and 23; 
    (9) taconite homestead credit as provided in section 
273.135;  
    (10) supplemental homestead credit as provided in section 
273.1391.  
    The combination of all property tax credits must not exceed 
the gross tax amount.  
    Sec. 211.  Minnesota Statutes 1986, section 282.01, 
subdivision 1, is amended to read:  
    Subdivision 1.  [CLASSIFICATION; USE; EXCHANGE.] It is the 
general policy of this state to encourage the best use of 
tax-forfeited lands, recognizing that some lands in public 
ownership should be retained and managed for public benefits 
while other lands should be returned to private ownership.  All 
parcels of land becoming the property of the state in trust 
under the provisions of any law now existing or hereafter 
enacted declaring the forfeiture of lands to the state for 
taxes, shall be classified by the county board of the county 
wherein such parcels lie as conservation or nonconservation.  
Such classification shall be made with consideration, among 
other things, to the present use of adjacent lands, the 
productivity of the soil, the character of forest or other 
growth, accessibility of lands to established roads, schools, 
and other public services, their peculiar suitability or 
desirability for particular uses and the suitability of the 
forest resources on the land for multiple use, sustained yield 
management.  Such classification, furthermore, shall aid:  to 
encourage and foster a mode of land utilization that will 
facilitate the economical and adequate provision of 
transportation, roads, water supply, drainage, sanitation, 
education, and recreation; to facilitate reduction of 
governmental expenditures; to conserve and develop the natural 
resources; and to foster and develop agriculture and other 
industries in the districts and places best suited thereto. 
    In making such classification the county board may make use 
of such data and information as may be made available by any 
office or department of the federal, state, or local 
governments, or by any other person or agency possessing 
information pertinent thereto at the time such classification is 
made.  Such lands may be reclassified from time to time as the 
county board may deem necessary or desirable, except as to 
conservation lands held by the state free from any trust in 
favor of any taxing district.  
    If any such lands are located within the boundaries of any 
organized town, with taxable valuation in excess of $20,000, or 
incorporated municipality, the classification or 
reclassification and sale shall first be approved by the town 
board of such town or the governing body of such municipality 
insofar as the lands located therein are concerned.  The town 
board of the town or the governing body of the municipality will 
be deemed to have approved the classification or 
reclassification and sale if the county board is not notified of 
the disapproval of the classification or reclassification and 
sale within 90 days of the date the request for approval was 
transmitted to the town board of the town or governing body of 
the municipality.  If the town board or governing body desires 
to acquire any parcel lying in the town or municipality by 
procedures authorized in this subdivision, it shall, within 90 
days of the request for classification or reclassification and 
sale, file a written application with the county board to 
withhold the parcel from public sale.  The county board shall 
then withhold the parcel from public sale for one year.  
    Any tax-forfeited lands may be sold by the county board to 
any organized or incorporated governmental subdivision of the 
state for any public purpose for which such subdivision is 
authorized to acquire property or may be released from the trust 
in favor of the taxing districts upon application of any state 
agency for any authorized use at not less than their value as 
determined by the county board.  The commissioner of revenue 
shall have power to convey by deed in the name of the state any 
tract of tax-forfeited land held in trust in favor of the taxing 
districts, to any governmental subdivision for any authorized 
public use, provided that an application therefor shall be 
submitted to the commissioner with a statement of facts as to 
the use to be made of such tract and the need therefor and the 
recommendation of the county board.  The deed of conveyance 
shall be upon a form approved by the attorney general and shall 
be conditioned upon continued use for the purpose stated in the 
application, provided, however, that if the governing body of 
such governmental subdivision by resolution determines that some 
other public use shall be made of such lands, and such change of 
use is approved by the county board and an application for such 
change of use is made to, and approved by, the commissioner, 
such changed use may be made of such lands without the necessity 
of the governing body conveying the lands back to the state and 
securing a new conveyance from the state to the governmental 
subdivision for such new public use. 
    Whenever any governmental subdivision to which any 
tax-forfeited land has been conveyed for a specified public use 
as provided in this section shall fail to put such land to such 
use, or to some other authorized public use as provided herein, 
or shall abandon such use, the governing body of the subdivision 
shall authorize the proper officers to convey the same, or such 
portion thereof not required for an authorized public use, to 
the state of Minnesota, and such officers shall execute a deed 
of such conveyance forthwith, which conveyance shall be subject 
to the approval of the commissioner and in form approved by the 
attorney general, provided, however, that a sale, lease, 
transfer or other conveyance of such lands by a housing and 
redevelopment authority as authorized by sections 462.411 1 to 
462.705 47 shall not be an abandonment of such use and such 
lands shall not be reconveyed to the state nor shall they revert 
to the state.  A certificate made by a housing and redevelopment 
authority referring to a conveyance by it and stating that the 
conveyance has been made as authorized by sections 462.411 1 to 
462.705 47 may be filed with the county recorder or registrar of 
titles, and the rights of reverter in favor of the state 
provided by this subdivision will then terminate.  No vote of 
the people shall be required for such conveyance.  In case any 
such land shall not be so conveyed to the state, the 
commissioner of revenue shall by written instrument, in form 
approved by the attorney general, declare the same to have 
reverted to the state, and shall serve a notice thereof, with a 
copy of the declaration, by certified mail upon the clerk or 
recorder of the governmental subdivision concerned, provided, 
that no declaration of reversion shall be made earlier than five 
years from the date of conveyance for failure to put such land 
to such use or from the date of abandonment of such use if such 
lands have been put to such use.  The commissioner shall file 
the original declaration in the commissioner's office, with 
verified proof of service as herein required.  The governmental 
subdivision may appeal to the district court of the county in 
which the land lies by filing with the court administrator a 
notice of appeal, specifying the grounds of appeal and the 
description of the land involved, mailing a copy thereof by 
certified mail to the commissioner of revenue, and filing a copy 
thereof for record with the county recorder or registrar of 
titles, all within 30 days after the mailing of the notice of 
reversion.  The appeal shall be tried by the court in like 
manner as a civil action.  If no appeal is taken as herein 
provided, the declaration of reversion shall be final.  The 
commissioner of revenue shall file for record with the county 
recorder or registrar of titles, of the county within which the 
land lies, a certified copy of the declaration of reversion and 
proof of service. 
    Any city of the first class now or hereafter having a 
population of 450,000, or over, or its board of park 
commissioners, which has acquired tax-forfeited land for a 
specified public use pursuant to the terms of this section, may 
convey said land in exchange for other land of substantially 
equal worth located in said city of the first class, provided 
that the land conveyed to said city of the first class now or 
hereafter having a population of 450,000, or over, or its board 
of park commissioners, in exchange shall be subject to the 
public use and reversionary provisions of this section; the 
tax-forfeited land so conveyed shall thereafter be free and 
discharged from the public use and reversionary provisions of 
this section, provided that said exchange shall in no way affect 
the mineral or mineral rights of the state of Minnesota, if any, 
in the lands so exchanged. 
    Sec. 212.  Minnesota Statutes 1986, section 290.61, is 
amended to read:  
    290.61 [PUBLICITY OF RETURNS, INFORMATION.] 
    It shall be unlawful for the commissioner or any other 
public official or employee to divulge or otherwise make known 
in any manner any particulars set forth or disclosed in any 
report or return required by this chapter, or any information 
concerning, the taxpayer's affairs acquired from the taxpayer's 
records, officers, or employees while examining or auditing any 
taxpayer's liability for taxes imposed hereunder, except in 
connection with a proceeding involving taxes due under this 
chapter from the taxpayer making such return or to comply with 
the provisions of sections 256.978, 268.12, subdivision 12, 
270A.11, 273.1314 174, subdivision 16 5, 290.612 and 302A.821.  
The commissioner may furnish a copy of any taxpayer's return, 
including audit documents and information, to any official of 
the United States or of any state having duties to perform in 
respect to the assessment or collection of any tax imposed upon 
or measured by income, if such taxpayer is required by the laws 
of the United States or of such state to make a return therein.  
Prior to the release of any information to any official of the 
United States or any other state under the provisions of this 
section, the person to whom the information is to be released 
shall sign an agreement which provides that the person will 
protect the confidentiality of the returns and information 
revealed thereby to the extent that it is protected under the 
laws of the state of Minnesota.  The commissioner and all other 
public officials and employees shall keep and maintain the same 
secrecy in respect to any information furnished by any 
department, commission, or official of the United States or of 
any other state in respect to the income of any person as is 
required by this section in respect to information concerning 
the affairs of taxpayers under this chapter.  Nothing herein 
contained shall be construed to prohibit the commissioner from 
publishing statistics so classified as not to disclose the 
identity of particular returns or reports and the items 
thereof.  Upon request of a majority of the members of the 
senate tax committee or of the house tax committee or the tax 
study commission, the commissioner shall furnish abstracted 
financial information to those committees for research purposes 
from returns or reports filed pursuant to this chapter, without 
disclosing the name, address, social security number, business 
identification number or any other item of information 
associated with any return or report which the commissioner 
believes is likely to identify the taxpayer.  The commissioner 
shall not furnish the actual return, or a portion thereof, or a 
reproduction or copy of any return or portion thereof.  
"Abstracted financial information" means only the dollar amounts 
set forth on each line on the form including the filing status. 
    Any person violating the provisions of this section shall 
be guilty of a gross misdemeanor. 
    In order to locate the named payee on state warrants issued 
pursuant to this chapter or chapter 290A and undeliverable by 
the United States postal service, the commissioner may publish 
in any newspaper of general circulation in this state or make 
available to radio or television stations a list of the name and 
last known address of the payee as shown on the reports or 
returns filed with the commissioner.  The commissioner may 
exclude the names of payees whose refunds are in an amount which 
is less than a minimal amount to be determined by the 
commissioner.  The list shall not contain any particulars set 
forth on any report or return.  The publication or announcement 
shall include instructions on claiming the warrants. 
    An employee of the department of revenue may, in connection 
with official duties relating to any audit, collection activity, 
or civil or criminal tax investigation or any other offense 
under this chapter, disclose return information to the extent 
that such disclosure is necessary in obtaining information, 
which is not otherwise reasonably available, with respect to the 
correct determination of tax, liability for tax, or the amount 
to be collected or with respect to the enforcement of any other 
provision of this chapter.  
    In order to facilitate processing of returns and payments 
of taxes required by this chapter, or to facilitate the 
development, implementation, and use of computer programs and 
automated procedures for purposes of administering this chapter 
or chapter 290A, the commissioner may contract with outside 
vendors and may disclose private and nonpublic data to the 
vendor.  The data disclosed will be administered by the vendor 
consistent with this section, and the vendor must agree to 
subject the vendor and the vendor's employees to the civil and 
criminal penalties provided by law for unlawful disclosure. 
    Information from a tax return required under this chapter 
on a holder of a license issued by the Minnesota racing 
commission or an owner of a horse may be provided by the 
commissioner to the Minnesota racing commission. 
    The commissioner may provide to the Minnesota supreme court 
and the board of professional responsibility information 
regarding the amount of any uncontested delinquent taxes due 
under this chapter or a failure to file a return due under this 
chapter by an attorney admitted to practice law in this state 
under chapter 481.  
    Sec. 213.  Minnesota Statutes 1986, section 298.2211, 
subdivision 1, is amended to read:  
    Subdivision 1.  [PURPOSE; GRANT OF AUTHORITY.] In order to 
accomplish the legislative purposes specified in chapters 362A, 
sections 143 to 166 and chapter 462C, and 474, within tax relief 
areas as defined in section 273.134, the commissioner of iron 
range resources and rehabilitation may exercise the following 
powers:  (1) all powers conferred upon a rural development 
financing authority under sections 362A.01 to 362A.05 sections 
143 to 150; (2) all powers conferred upon a city under chapter 
462C, subject to compliance with the provisions of section 
474A.07; (3) all powers conferred upon a municipality or a 
redevelopment agency under chapter 474 sections 153 to 166; (4) 
all powers provided by chapter 362A sections 143 to 152 to 
further any of the purposes and objectives of chapters chapter 
462C and 474 sections 153 to 166; and (5) all powers conferred 
upon a municipality or an authority under sections 273.73 175 to 
273.76 178, section 273.77 179, except paragraph 
(a) subdivision 2 thereof, and section 273.78 180, subject to 
compliance with the provisions of section 273.74 176, 
subdivisions 1, 2, and 3; provided that any tax increments 
derived by the commissioner from the exercise of this authority 
may be used only to finance or pay premiums or fees for 
insurance, letters of credit, or other contracts guaranteeing 
the payment when due of net rentals under a project lease or the 
payment of principal and interest due on or repurchase of bonds 
issued to finance a project or program, to accumulate and 
maintain reserves securing the payment when due on bonds issued 
to finance a project or program, or to provide an interest rate 
reduction program pursuant to section 462.445 12, subdivision 10 
7.  Tax increments and earnings thereon remaining in any bond 
reserve account after payment or discharge of any bonds secured 
thereby shall be used within one year thereafter in furtherance 
of this section or returned to the county auditor of the county 
in which the tax increment financing district is located.  If 
returned to the county auditor, the county auditor shall 
immediately allocate the amount among all government units which 
would have shared therein had the amount been received as part 
of the other ad valorem taxes on property in the district most 
recently paid, in the same proportions as other taxes were 
distributed, and shall immediately distribute it to the 
government units in accordance with the allocation.  
    Sec. 214.  Minnesota Statutes 1986, section 298.2211, 
subdivision 3, is amended to read:  
    Subd. 3.  [PROJECT APPROVAL.] All projects authorized by 
this section shall be submitted by the commissioner to the iron 
range resources and rehabilitation board, which shall recommend 
approval or disapproval or modification of the projects.  Each 
project shall then be submitted to the legislative advisory 
committee for any review and comment the committee deems 
appropriate.  Prior to the commencement of a project involving 
the exercise by the commissioner of any authority of sections 
273.71 to 273.86 175 to 180, the governing body of each 
municipality in which any part of the project is located and the 
county board of any county containing portions of the project 
not located in an incorporated area shall by majority vote 
approve or disapprove the project.  Any project, as so approved 
by the board and the applicable governing bodies, if any, 
together with any comment provided by the legislative advisory 
committee, detailed information concerning the project, its 
costs, the sources of its funding, and the amount of any bonded 
indebtedness to be incurred in connection with the project, 
shall be transmitted to the governor, who shall approve, 
disapprove, or return the proposal for additional consideration 
within 30 days of receipt.  No project authorized under this 
section shall be undertaken, and no obligations shall be issued 
and no tax increments shall be expended for a project authorized 
under this section until the project has been approved by the 
governor.  
    Sec. 215.  Minnesota Statutes 1986, section 353.01, 
subdivision 6, is amended to read:  
    Subd. 6.  [GOVERNMENTAL SUBDIVISION.] "Governmental 
subdivision" means a county, city, town, school district within 
this state, or a department or unit of state government, or any 
public body whose revenues are derived from taxation, fees, 
assessments or from other sources, but does not mean any 
municipal housing and redevelopment authority organized under 
the provisions of sections 462.415 to 462.705 1 to 47; or any 
port authority organized pursuant to chapter 458 sections 49 to 
69; or any hospital district organized or reorganized prior to 
July 1, 1975 pursuant to sections 447.31 to 447.37. 
    Sec. 216.  Minnesota Statutes 1986, section 355.11, 
subdivision 5, is amended to read:  
    Subd. 5.  "Employing unit" means any municipal housing and 
redevelopment authorities organized pursuant to sections 462.415 
1 to 462.705 47 and any soil and water conservation district 
organized pursuant to chapter 40 or any port authority organized 
pursuant to chapter 458 sections 49 to 69, or any economic 
development authority organized pursuant to sections 458C.01 to 
458C.23 91 to 109, or any hospital district organized or 
reorganized pursuant to sections 447.31 to 447.37. 
    Sec. 217.  Minnesota Statutes 1986, section 355.16, is 
amended to read:  
    355.16 [COSTS DEFRAYED FROM PROCEEDS OF SPECIAL BENEFIT 
TAXES.] 
    The proceeds of the special benefit taxes authorized to be 
levied for redevelopment purposes under section 462.545 33, 
subdivision 6, may be used to defray all or part of the costs 
incurred by any housing and redevelopment authority under the 
provisions of sections 355.11 to 355.16. 
    Sec. 218.  Minnesota Statutes 1986, section 412.251, is 
amended to read:  
    412.251 [ANNUAL TAX LEVY.] 
    The council shall make its annual tax levy by resolution 
within the per capita limits established by statute.  The amount 
of taxes levied for general city purposes shall not exceed 
11-2/3 mills on each dollar of the assessed valuation of the 
property taxable in the city in cities having an assessed 
valuation of less than $1,500,000 and 10 mills on each dollar in 
cities having an assessed valuation of more than $1,500,000.  In 
calculating such limit property used for homestead purposes 
shall be figured as provided in section 273.13, subdivision 7a.  
The following taxes may be levied in addition to the levies 
above authorized: 
    (1) A tax for the payment of principal and interest on 
outstanding obligations of the city as provided by sections 
475.61, 475.73 and 475.74. 
    (2) A tax for the payment of judgments as authorized by 
section 465.14. 
    (4) A maximum of one-third of one mill but not to exceed 
$500 to provide musical entertainment to the public in public 
buildings or on public grounds. 
    (5) A tax for band purposes as authorized by section 449.09.
    (6) A tax for the support of a municipal forest, as 
authorized by section 459.06. 
    (7) A tax for advertising purposes, as authorized by 
section 465.56 190. 
    (8) A tax for forest fire protection in any city in a 
forest area, as authorized by section 88.04. 
    (9) A maximum of 1-2/3 mills for the utilities fund in any 
city whose utilities are under the jurisdiction of a public 
utilities commission.  Such tax shall be levied for the purpose 
of paying the cost of the utility service or other services 
supplied to the city. 
    (10) A tax for the support of a public library, as 
authorized by section 134.07. 
    (11) A tax for firefighters' relief association purposes as 
authorized by sections 69.772, subdivision 4, 69.773, 
subdivision 5, or other statutes. 
    (12) Such other special taxes as may be authorized by law. 
    Nothing in this section shall be construed to reduce levies 
of any municipality below the per capita levy spread in 1970. 
    Sec. 219.  Minnesota Statutes 1986, section 462C.02, 
subdivision 6, is amended to read:  
    Subd. 6.  "City" means any statutory or home rule charter 
city, a county housing and redevelopment authority created by 
special law or authorized by its county to exercise its powers 
pursuant to section 462.426 4, or any public body which (a) is 
the housing and redevelopment authority in and for a statutory 
or home rule charter city, the port authority of a statutory or 
home rule charter city, or an economic development authority of 
a city established under sections 458C.01 to 458C.23 91 to 109, 
and (b) is authorized by ordinance to exercise, on behalf of a 
statutory or home rule charter city, the powers conferred by 
sections 462C.01 to 462C.10.  
    Sec. 220.  Minnesota Statutes 1986, section 462C.02, 
subdivision 9, is amended to read:  
    Subd. 9.  "Targeted area" means 
    (a) a development district established pursuant to section 
472A.03 127, 
    (b) a development district established pursuant to Laws 
1971, chapter 677 as amended, 
    (c) a redevelopment project established pursuant to section 
462.521, 
    (d) an industrial development district established pursuant 
to section 458.191, 
    (e) a census tract in which 70 percent or more of the 
families have income which is 80 percent or less of the 
statewide median family income as estimated by the United States 
Department of Housing and Urban Development, 
    (f) an area of chronic economic distress designated by the 
Minnesota housing finance agency, or 
    (g) an economic development district established pursuant 
to section 458C.14. 
    Sec. 221.  Minnesota Statutes 1986, section 462C.05, 
subdivision 7, is amended to read:  
    Subd. 7.  A development may consist of a combination of a 
multifamily housing development and a new or existing health 
care facility, as defined by section 474.02 154, if the 
following conditions are satisfied:  
    (a) The multifamily housing development is designed and 
intended to be used for rental occupancy;  
    (b) The multifamily housing development is designed and 
intended to be used primarily by elderly or physically 
handicapped persons; and 
    (c) Nursing, medical, personal care, and other health 
related assisted living services are available on a 24-hour 
basis in the development to the residents.  
    The limitations of section 462C.04, subdivision 2, clause 
(c), shall not apply to projects defined in this subdivision and 
approved by the Minnesota housing finance agency before October 
1, 1983.  
    The Minnesota housing finance agency shall provide, in the 
annual report required by section 462C.04, subdivision 2, 
information on the costs incurred for the issuance of bonds for 
projects defined in this subdivision.  The report shall also 
include the Minnesota housing finance agency's recommendations 
for the regulation of costs of issuance for future issues. 
    Sec. 222.  Minnesota Statutes 1986, section 462C.06, is 
amended to read:  
    462C.06 [COUNTY HOUSING AND REDEVELOPMENT AUTHORITY ACTING 
ON BEHALF OF CITY.] 
    A housing and redevelopment authority in and for a county 
may exercise the powers conferred by sections 462C.01 to 462C.10 
either (1) on its own behalf or (2) on behalf of a city (other 
than a county housing and redevelopment authority), if the city 
authorizes the housing and redevelopment authority in and for 
the county in which the city is located to exercise such powers 
and the county has authorized its housing and redevelopment 
authority to exercise its powers pursuant to section 462.426 4 
or the county housing and redevelopment authority has been 
created by special law; provided, however, that any program 
undertaken pursuant to this section is subject to the 
limitations of sections 462C.03 and 462C.04 in the case of a 
single-family housing program, and subject to the limitations of 
section 462C.05 in the case of a multifamily housing development 
program. 
    Sec. 223.  Minnesota Statutes 1986, section 465.54, is 
amended to read:  
    465.54 [MAY PAY EXPENSES FROM GENERAL FUND OF STATUTORY 
CITY.] 
    The council of any statutory city may pay from the general 
fund of the municipality, for the purposes of section 465.53 
187, expenses incurred by the governing officers in the 
performance of their official duties.  Trips for lobbying 
purposes or trips to meetings or conventions not in connection 
with specific municipal projects pending before the officer 
making the trip are not authorized for payment under this 
section. 
    All expenditures for the purposes of this section shall be 
within the statutory limits upon tax levies in the statutory 
city. 
    Sec. 224.  Minnesota Statutes 1986, section 465.74, 
subdivision 7, is amended to read:  
    Subd. 7.  [PORT AUTHORITIES, OWNERSHIP AND OPERATION OF 
DISTRICT HEATING SYSTEMS.] A port authority organized pursuant 
to sections 458.09 to 458.1991 49 to 69 or a special law may 
acquire, own, construct, and operate a district heating system 
or systems to provide heating and cooling services and other 
energy services within the statutory or home rule charter city 
within which it is created.  The authority may, in conjunction 
with a district heating system, acquire, own, construct, and 
operate an energy management and control system to monitor and 
control users' energy demand within the city as a related 
ancillary function of the district heating system.  The 
authority may, in conjunction with a district heating system, 
acquire, own, construct, and operate ancillary services related 
to an energy management and control system including, but not 
limited to, sensing and monitoring services for supervision of 
fire and life safety systems and building security systems 
within the city.  
    This section shall be effective for a port authority only 
after adoption of an ordinance or resolution by the board of the 
port authority and by the governing body of the city stating 
their intention to exercise the authority allowed by this 
section.  
    A port authority may, with approval of the city, lease part 
or all of the district heating system or contract with respect 
to part or all of the district heating system, with any person, 
corporation, association, or public utility company for the 
purpose of constructing, improving, operating, or maintaining 
the district heating system.  
    Sec. 225.  Minnesota Statutes 1986, section 465.77, is 
amended to read:  
    465.77 [REGULATION OF DRILLING TO PROTECT MINED UNDERGROUND 
SPACE DEVELOPMENT.] 
    A home rule charter city or statutory city may regulate 
drilling for the purposes and in the manner provided in section 
472B.08 142. 
    Sec. 226.  Minnesota Statutes 1986, section 471A.03, 
subdivision 9, is amended to read:  
    Subd. 9.  [USE OF BOND PROCEEDS.] The municipality may 
issue bonds and other obligations and apply their proceeds 
toward the payment of the costs of the related facilities in the 
same manner and subject to the same conditions and limitations 
that would apply if the related facilities were acquired, 
constructed, owned, and operated exclusively by the municipality 
and for these purposes, related facilities shall be considered 
to be a project within the meaning of section 474.02 154, 
subdivision 1a 2, paragraph (b). 
    Sec. 227.  Minnesota Statutes 1986, section 473.195, 
subdivision 1, is amended to read:  
    Subdivision 1.  In addition to, and not in limitation of, 
all other powers invested in it by law, the council, and the 
members thereof, shall have, throughout the metropolitan area, 
the same functions, rights, powers, duties, privileges, 
immunities and limitations as are provided for housing and 
redevelopment authorities created for municipalities, and for 
the commissioners of such authorities.  The provisions of 
sections 462.411 to 462.705 1 to 47 and of all other laws 
relating to housing and redevelopment authorities shall be 
applicable to the council when functioning as an authority, 
except as herein provided or as clearly indicated otherwise from 
the context of such laws. Section 462.425 3 shall have no 
application to the council nor to any municipality or county 
within which the council undertakes a project.  Any municipality 
or county, and the governing bodies of any municipality or 
county, within and for which the council undertakes a project 
shall have all the powers, authority and obligations granted to 
municipalities and counties by the provisions of 
sections 462.411 to 462.705 1 to 47 and all other laws relating 
to housing and redevelopment authorities.  The council may plan 
and propose projects within the boundaries of any municipality, 
and may otherwise exercise the powers of an authority at any 
time; provided, however, that the council shall not implement 
any housing project, housing development project, redevelopment 
project or urban renewal project within the boundaries of any 
municipality or county without the prior approval of the 
governing body of the municipality or county in which any such 
project is to be located; and provided further that the council 
shall not propose any project to the governing body of a 
municipality or county having an active authority created 
pursuant to section 462.425 3, or pursuant to special 
legislation, without first submitting the proposed project to 
the municipal or county authority for its review and 
recommendations; and provided further that as to any project 
proposed by the council and approved by the municipality or 
county, the council shall not undertake the project if within 60 
days after it has been proposed, the municipality or county 
agrees to undertake the project.  All plans and projects of the 
council shall be consistent with the comprehensive development 
guide. 
    Sec. 228.  Minnesota Statutes 1986, section 473.201, 
subdivision 1, is amended to read:  
    Subdivision 1.  The council shall allocate the net 
unreimbursed costs of any project which it undertakes to the 
municipality or group of municipalities or county for which the 
project is undertaken.  The governing body of each such 
municipality or county shall impose taxes or other revenue 
measures to provide funds necessary to pay the allocated costs, 
and the governing body of each such municipality or county shall 
have all the powers, authority and obligation granted to 
authorities by section 462.545 33 and all other provisions of 
law regarding the financing of such projects, provided that the 
council shall have the powers of an authority for purposes of 
applying for and receiving federal grants in connection with all 
projects which it undertakes.  
    Sec. 229.  Minnesota Statutes 1986, section 473.504, 
subdivision 11, is amended to read:  
    Subd. 11.  The commission may sell or otherwise dispose of 
any real or personal property acquired by it which is no longer 
required for accomplishment of its purposes.  Such property may 
be sold in the manner provided by section 458.196 66, insofar as 
practical.  The commission may give such notice of sale as it 
shall deem appropriate.  When the commission determines that any 
property or any interceptor or treatment works or any part 
thereof which has been acquired from a local government unit 
without compensation is no longer required, but is required as a 
local facility by the government unit from which it was 
acquired, the commission may by resolution transfer it to such 
government unit.  
    Sec. 230.  Minnesota Statutes 1986, section 473.556, 
subdivision 6, is amended to read:  
    Subd. 6.  [DISPOSITION OF PROPERTY.] (a) The commission may 
sell or otherwise dispose of any real or personal property 
acquired by it which is no longer required for accomplishment of 
its purposes.  The property shall be sold in the manner provided 
by section 458.196 66, insofar as practical and consistent with 
sections 473.551 to 473.595.  
    (b) Real property at the metropolitan sports area (not 
including the indoor public assembly facility and adjacent 
parking facilities) which is no longer needed for sports 
facilities may be sold or leased for residential, commercial, or 
industrial development in accordance with the procedures in 
section 458.196 66 within two years to a private, for-profit 
entity, and thereafter the property shall be subject to all 
applicable taxes and assessments and all government laws, rules 
and ordinances bearing on use and development as if the property 
were privately owned.  
    (c) Any real property right, title, or interest within the 
provisions of paragraph (b) owned by the commission may be sold 
or leased in whole or in part to the port authority of the city 
of Bloomington to further the general plan of port improvement 
or industrial development or for any other purpose which the 
authority considers to be in the best interests of the district 
and its people.  The property shall be sold or leased to the 
authority in accordance with section 458.196 66, subdivisions 1 
to 4.  Section 458.196 66, subdivisions 5 to 7 shall not apply 
to a sale under this paragraph.  
    (d) Real property disposed of under clause (c) shall be 
subject to leases, agreements, or other written interests in 
force on June 1, 1983.  
    (e) The proceeds from the sale of any real property at the 
metropolitan sports area shall be paid to the council and used 
for debt service or retirement. 
    Sec. 231.  Minnesota Statutes 1986, section 473.638, 
subdivision 2, is amended to read:  
    Subd. 2.  [RETENTION OR SALE OF PROPERTY.] The commission 
may retain any property now owned by it or acquired under 
subdivision 1 and use it for a lawful purpose, or it may provide 
for the sale or other disposition of the property in accordance 
with a redevelopment plan in the same manner and upon the same 
terms as the housing and redevelopment authority and governing 
body of a municipality under the provisions of section 462.525 
29, all subject to the provisions of section 473.636, 
subdivision 2, or to existing land use and development control 
measures approved by the council.  
    Sec. 232.  Minnesota Statutes 1986, section 473.811, 
subdivision 8, is amended to read:  
    Subd. 8.  [COUNTY SALE OR LEASE.] Each metropolitan county 
may sell or lease any facilities or property or property rights 
previously used or acquired to accomplish the purposes specified 
by sections 473.149, 473.151, 473.801 to 473.823, 473.827, 
473.831, 473.833, and 473.834.  Such property may be sold in the 
manner provided by section 458.196 66, or may be sold in the 
manner and on the terms and conditions determined by the county 
board.  Each metropolitan county may convey to or permit the use 
of any such property by a local government unit, with or without 
compensation, without submitting the matter to the voters of the 
county.  No real property or property rights acquired pursuant 
to this section, may be disposed of in any manner unless and 
until the county shall have submitted to the agency and the 
metropolitan council for review and comment the terms on and the 
use for which the property will be disposed of.  The agency and 
the council shall review and comment on the proposed disposition 
within 60 days after each has received the data relating thereto 
from the county. 
    Sec. 233.  Minnesota Statutes 1986, section 473.852, 
subdivision 6, is amended to read:  
    Subd. 6.  "Fiscal devices" means the valuation of property 
pursuant to section 273.111, the designation of urban and rural 
service districts, pursuant to section 272.67, and the 
establishment of development districts pursuant to sections 
472A.01 to 472A.13 125 to 135, and any other statutes 
authorizing the creation of districts in which the use of tax 
increment bonding is authorized. 
    Sec. 234.  Minnesota Statutes 1986, section 473F.02, 
subdivision 3, is amended to read:  
    Subd. 3.  "Commercial-industrial property" means the 
following categories of property, as defined in section 273.13, 
excluding that portion of such property (1) which may, by law, 
constitute the tax base for a tax increment pledged pursuant to 
section 462.585 42 or 474.10 163, certification of which was 
requested prior to August 1, 1979, to the extent and while such 
tax increment is so pledged; (2) which may, by law, constitute 
the tax base for tax revenues set aside and paid over for credit 
to a sinking fund pursuant to direction of the city council in 
accordance with Laws 1963, chapter 881, as amended, to the 
extent that such revenues are so treated in any year; or (3) 
which is exempt from taxation pursuant to section 272.02:  
    (a) That portion of class 3 property defined in Minnesota 
Statutes 1971, section 273.13, consisting of stocks of 
merchandise and furniture and fixtures used therewith; 
manufacturers' materials and manufactured articles; and tools, 
implements and machinery, whether fixtures or otherwise.  
    (b) That portion of class 4 property defined in Minnesota 
Statutes 1971, section 273.13, which is either used or zoned for 
use for any commercial or industrial purpose, except for such 
property which is, or, in the case of property under 
construction, will when completed be used exclusively for 
residential occupancy and the provision of services to 
residential occupants thereof.  Property shall be considered as 
used exclusively for residential occupancy only if each of not 
less than 80 percent of its occupied residential units is, or, 
in the case of property under construction, will when completed 
be occupied under an oral or written agreement for occupancy 
over a continuous period of not less than 30 days.  
    If the classification of property prescribed by section 
273.13 is modified by legislative amendment, the references in 
this subdivision shall be to such successor class or classes of 
property, or portions thereof, as embrace the kinds of property 
designated in this subdivision.  
    Sec. 235.  Minnesota Statutes 1986, section 473F.05, is 
amended to read:  
    473F.05 [ASSESSED VALUATION; 1972 AND SUBSEQUENT YEARS.] 
    On or before November 20 of 1972 and each subsequent year, 
the assessors within each county in the area shall determine and 
certify to the county auditor the assessed valuation in that 
year of commercial-industrial property subject to taxation 
within each municipality in the county, determined without 
regard to section 273.76 178, subdivision 3. 
    Sec. 236.  Minnesota Statutes 1986, section 473F.08, 
subdivision 2, is amended to read:  
    Subd. 2.  The taxable value of a governmental unit is its 
assessed valuation, as determined in accordance with other 
provisions of law including section 273.76 178, subdivision 3, 
subject to the following adjustments:  
    (a) There shall be subtracted from its assessed valuation, 
in each municipality in which the governmental unit exercises ad 
valorem taxing jurisdiction, an amount which bears the same 
proportion to 40 percent of the amount certified in that year 
pursuant to section 473F.06 in respect to that municipality as 
the total preceding year's assessed valuation of 
commercial-industrial property which is subject to the taxing 
jurisdiction of the governmental unit within the municipality, 
determined without regard to section 273.76 178, subdivision 3, 
bears to the total preceding year's assessed valuation of 
commercial-industrial property within the municipality, 
determined without regard to section 273.76 178, subdivision 3;  
    (b) There shall be added to its assessed valuation, in each 
municipality in which the governmental unit exercises ad valorem 
taxing jurisdiction, an amount which bears the same proportion 
to the areawide base for the year attributable to that 
municipality as the total preceding year's assessed valuation of 
residential property which is subject to the taxing jurisdiction 
of the governmental unit within the municipality bears to the 
total preceding year's assessed valuation of residential 
property of the municipality.  
    Sec. 237.  Minnesota Statutes 1986, section 473F.08, 
subdivision 4, is amended to read:  
    Subd. 4.  In 1972 and subsequent years, the county auditor 
shall divide that portion of the levy determined pursuant to 
subdivision 3, clause (b), by the assessed valuation of the 
governmental unit, taking section 273.76 178, subdivision 3 into 
account, less that portion subtracted from assessed valuation 
pursuant to subdivision 2, clause (a).  The resulting rate shall 
apply to all taxable property except commercial-industrial 
property, which shall be taxed in accordance with subdivision 6. 
    Sec. 238.  Minnesota Statutes 1986, section 473F.08, 
subdivision 6, is amended to read:  
    Subd. 6.  The rate of taxation determined in accordance 
with subdivision 5 shall apply in the taxation of each item of 
commercial-industrial property subject to taxation within a 
municipality, including property located within any tax 
increment financing district, as defined in section 273.73 175, 
subdivision 9, to that portion of the assessed valuation of the 
item which bears the same proportion to its total assessed 
valuation as 40 percent of the amount determined pursuant to 
section 473F.06 in respect to the municipality in which the 
property is taxable bears to the amount determined pursuant to 
section 473F.05.  The rate of taxation determined in accordance 
with subdivision 4 shall apply in the taxation of the remainder 
of the assessed valuation of the item. 
    Sec. 239.  Minnesota Statutes 1986, section 475.525, 
subdivision 3, is amended to read:  
    Subd. 3.  [REDEVELOPMENT AGENCY.] A municipality may 
itself, or by ordinance authorize any redevelopment agency as 
defined in section 474.02 154, subdivision 3, acting for the 
municipality, to exercise any and all of the powers granted to 
the municipality under subdivision 2 and to the redevelopment 
agency under any other law for the purpose of financing all or 
any portion of the district heating system and any conversion 
facilities for modifying the user's heating or water system to 
use the heat energy converted from the steam or hot water 
furnished by the district heating system including, but without 
limitation, the payment of interest during construction and for 
a reasonable time thereafter and the establishment of reserves 
for bond payment and for working capital, in which event if the 
issuer is a redevelopment agency the sources of revenue that may 
be pledged to the payment of revenue bonds or obligations shall 
include any revenues of the redevelopment agency.  The proceeds 
of bonds or obligations issued by the municipality or 
redevelopment agency may be used to make or purchase loans for 
facilities which the issuer estimates will require such 
financing, and, for the purpose of making or purchasing such 
loans the issuer shall have power to enter into loan agreements 
and other related agreements, both before and after the issuance 
of the obligations, with such persons, firms, public or private 
corporations, federal or state agencies, governmental units, and 
under such terms and conditions as the issuer shall deem 
appropriate; and any governmental unit in the state shall have 
the power to apply, contract for and receive the loans without 
limitation under any other provisions of chapter 475.  
    Sec. 240.  Minnesota Statutes 1986, section 477A.011, 
subdivision 7, is amended to read:  
    Subd. 7.  [LOCAL REVENUE BASE.] For the 1984 aid 
distribution, a municipality's local revenue base means the sum 
of:  
    (a) (1) in the case of a municipality which had a local 
revenue base for the 1981 aid distribution, the 1981 aid 
distribution base calculated pursuant to Minnesota Statutes 
1980, section 477A.01, less any amount added to the local 
revenue base for the costs of principal and interest on bonded 
debt incurred for the purpose of providing capital replacement 
for streets, curbs, gutters, storm sewers, and bridges, 
multiplied by a factor of 1.208, and multiplied by a factor 
equal to the estimated 1981 population divided by the 1980 
census population, provided that the latter factor is greater 
than 1.0; or 
    (2) in the case of a municipality which did not have a 
local revenue base for the 1981 aid distribution, the local 
government aid distribution certified for 1983 pursuant to 
sections 477A.011 to 477A.014, plus the property tax levy, 
exclusive of levies for bonded indebtedness for taxes payable in 
1983;  
    (b) the total amount certified in calendar year 1983 
pursuant to Minnesota Statutes 1982, section 273.138; and 
    (c) the total amount certified in calendar year 1983 
pursuant to Minnesota Statutes 1982, section 273.139, including 
any amount received by a tax increment financing district as 
defined by section 273.73 175, subdivision 9, or which qualifies 
for exemption pursuant to 273.78 section 182, which lies totally 
within the municipality, and including any amount which would 
have been received in 1983 pursuant to section 273.139 by a tax 
increment financing district as defined by section 273.73 175, 
subdivision 9, lying totally within the municipality, for a 
project approved by the Minnesota housing finance agency or the 
United States department of housing and urban development prior 
to March 1, 1983, had the project been completed and subject to 
taxation based upon full market value for taxes payable in 1983. 
    Any municipality whose payable 1983 levy exceeded its 
payable 1979 levy by a factor of ten, primarily because of a 
loss in state administered aids, may apply to the commissioner 
of revenue to have its local revenue base computed as if it did 
not have a local revenue base for the 1981 distribution. 
Applications shall be in the form and accompanied by the data 
required by the commissioner.  
    For 1985 and all subsequent calendar year aid distributions 
the local revenue base means the adjusted local revenue base 
used in the previous year aid distribution.  
    Sec. 241.  Minnesota Statutes 1986, section 504.24, 
subdivision 2, is amended to read:  
    Subd. 2.  If a landlord, an agent or other person acting 
under the landlord's direction or control, in possession of a 
tenant's personal property, fails to allow the tenant to retake 
possession of the property within 24 hours after written demand 
by the tenant or the tenant's duly authorized representative or 
within 48 hours, exclusive of weekends and holidays, after 
written demand by the tenant or a duly authorized representative 
when the landlord, the landlord's agent or person acting under 
the landlord's direction or control has removed and stored the 
personal property in accordance with subdivision 1 in a location 
other than the premises, the tenant shall recover from the 
landlord punitive damages not to exceed $300 in addition to 
actual damages and reasonable attorney's fees.  In determining 
the amount of punitive damages the court shall consider (a) the 
nature and value of the property; (b) the effect the deprivation 
of the property has had on the tenant; (c) if the landlord, an 
agent or other person acting under the landlord's direction or 
control unlawfully took possession of the tenant's property; and 
(d) if the landlord, an agent or other person under the 
landlord's direction or control acted in bad faith in failing to 
allow the tenant to retake possession of the property.  The 
provisions of this subdivision shall not apply to personal 
property which has been sold or otherwise disposed of by the 
landlord in accordance with subdivision 1, or to landlords who 
are housing authorities, created or authorized to be created by 
sections 462.415 to 462.705 1 to 47, and their agents and 
employees, in possession of a tenant's personal property, except 
that housing authorities must allow the tenant to retake 
possession of the property in accordance with this subdivision. 
    Sec. 242.  Minnesota Statutes 1986, section 609.321, 
subdivision 12, is amended to read:  
    Subd. 12.  A "public place" means a public street or 
sidewalk, a pedestrian skyway system as defined in section 
472A.02 126, subdivision 6 4, a hotel, motel, or other place of 
public accommodation, or a place licensed to sell intoxicating 
liquor, wine, nonintoxicating malt beverages, or food.  
     Sec. 243.  [INSTRUCTION TO REVISOR.] 
    If a provision of a section of Minnesota Statutes repealed 
by section 244 is amended by the 1987 regular session, the 
revisor shall codify the amendment consistent with the 
recodification of the affected section by this act, 
notwithstanding any law to the contrary. 
    Sec.  244.  [REPEALER.] 
    Minnesota Statutes 1986, sections 273.1312; 273.1313; 
273.1314; 273.71; 273.72; 273.73; 273.74; 273.75; 273.76; 273.77;
273.78; 273.86; 362A.01; 362A.02; 362A.03; 362A.04; 362A.041; 
362A.05; 362A.06; 373.31; 426.055; 458.09; 458.091; 458.10; 
458.11; 458.12; 458.14; 458.15; 458.16; 458.17; 458.18; 458.19; 
458.191; 458.192; 458.193; 458.194; 458.1941; 458.195; 458.196; 
458.197; 458.198; 458.199; 458.1991; 458.70; 458.701; 458.702; 
458.703; 458.711; 458.712; 458.713; 458.72; 458.74; 458.741; 
458.75; 458.76; 458.77; 458.771; 458.772; 458.773; 458.774; 
458.775; 458.776; 458.777; 458.778; 458.79; 458.80; 458.801; 
458.81; 458C.01; 458C.03; 458C.04; 458C.05; 458C.06; 458C.07; 
458C.08; 458C.09; 458C.10; 458C.11; 458C.12; 458C.13; 458C.14; 
458C.15; 458C.16; 458C.17; 458C.18; 458C.19; 458C.20; 458C.22; 
458C.23; 459.01; 459.02; 459.03; 459.04; 459.05; 459.31; 459.32; 
459.33; 459.34; 462.411; 462.415; 462.421; 462.425; 462.426; 
462.427; 462.428; 462.429; 462.4291; 462.432; 462.435; 462.441; 
462.445; 462.451; 462.455; 462.461; 462.465; 462.466; 462.471; 
462.475; 462.481; 462.485; 462.491; 462.495; 462.501; 462.505; 
462.511; 462.515; 462.521; 462.525; 462.531; 462.535; 462.541; 
462.545; 462.551; 462.555; 462.556; 462.561; 462.565; 462.571; 
462.575; 462.581; 462.585; 462.591; 462.595; 462.601; 462.605; 
462.611; 462.615; 462.621; 462.625; 462.631; 462.635; 462.641; 
462.645; 462.651; 462.655; 462.661; 462.665; 462.671; 462.675; 
462.681; 462.685; 462.691; 462.695; 462.701; 462.705; 462.712; 
462.713; 462.714; 462.715; 462.716; 465.026; 465.53; 465.55; 
465.56; 472.01; 472.02; 472.03; 472.04; 472.05; 472.06; 472.07; 
472.08; 472.09; 472.10; 472.11; 472.12; 472.125; 472.13; 472.14; 
472.15; 472.16; 472A.01; 472A.02; 472A.03; 472A.04; 472A.05; 
472A.06; 472A.07; 472A.09; 472A.10; 472A.11; 472A.12; 472A.13; 
472B.01; 472B.02; 472B.03; 472B.04; 472B.05; 472B.06; 472B.07; 
472B.08; 474.01; 474.02; 474.03; 474.04; 474.05; 474.06; 474.07; 
474.08; 474.09; 474.10; 474.11; 474.13; 474.15; Laws 1961, 
chapter 545; Laws 1963, chapters 254; and 827; Laws 1967, 
chapter 541; Laws 1969, chapter 98; Laws 1973, chapter 114; Laws 
1974, chapter 218; Laws 1975, chapter 326; Laws 1976, chapter 
234, section 3; Laws 1979, chapter 269, section 1; Laws 1980, 
chapters 453; and 595, sections 5 and 8; Laws 1982, chapter 523, 
article 24, section 2; Laws 1983, chapters 110; and 257, section 
1; Laws 1984, chapters 397; 498; and 548, section 9; and Laws 
1985, chapters 173; 177; 188; 189; 192; 199; 205; 206, sections 
2 and 3; and 301, sections 3 and 4; are repealed. 
    Approved May 28, 1987