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Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1988 

                        CHAPTER 702-S.F.No. 1963 
           An act relating to public finance; providing 
          requirements for the issuance and use of public debt; 
          amending Minnesota Statutes 1986, sections 375.83; 
          410.32; 475.54, by adding a subdivision; 475.60, 
          subdivision 3; 475.67, subdivision 13; Minnesota 
          Statutes 1987 Supplement, sections 469.012, 
          subdivision 1; 469.015, subdivision 4; 469.071, by 
          adding a subdivision; 469.155, subdivision 12; 
          474A.04, subdivision 6; 475.54, subdivision 1; and 
          475.66, subdivision 3; 475.67, subdivision 12; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 469; repealing Laws 1987, chapter 358, section 
          31. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 375.83, is 
amended to read: 
    375.83 [ECONOMIC AND AGRICULTURAL DEVELOPMENT.] 
    A county board may appropriate not more than $50,000 
annually out of the general revenue fund of the county to be 
paid to any incorporated development society or organization of 
this state which, in the board's opinion, will use the money for 
the best interests of the county in promoting, advertising, 
improving, or developing the economic and agricultural resources 
of the county.  The limitation on appropriations in this section 
does not prohibit accumulation of amounts in excess of $50,000 
in a fund to be used for the purposes of this section.  The 
total amount accumulated in the fund must not exceed $300,000. 
    Sec. 2.  Minnesota Statutes 1986, section 410.32, is 
amended to read:  
    410.32 [CITIES AUTHORIZED TO ISSUE CAPITAL NOTES FOR 
CERTAIN EQUIPMENT ACQUISITIONS.] 
    Notwithstanding any contrary provision of other law or 
charter, a home rule charter city may, by resolution and without 
public referendum, issue capital notes subject to the city debt 
limit to purchase public safety equipment, ambulance and other 
medical equipment, road construction and maintenance equipment, 
and other capital equipment having an expected useful life at 
least as long as the term of the notes.  The notes shall be 
payable in not more than five years and be issued on terms and 
in the manner the city determines.  The total principal amount 
of the capital notes issued in a fiscal year shall not exceed 
one-tenth of one percent of the assessed value of the city for 
that year.  A tax levy shall be made for the payment of the 
principal and interest on the notes, in accordance with section 
475.61, as in the case of bonds.  Notes issued under this 
section shall require an affirmative vote of two-thirds of the 
governing body of the city.  Unless prohibited by its charter, a 
home rule charter city may also issue capital notes subject to 
its debt limit in the manner and subject to the limitations 
applicable to statutory cities pursuant to section 412.301. 
    Sec. 3.  Minnesota Statutes 1987 Supplement, section 
469.012, subdivision 1, is amended to read:  
    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 469.001 to 469.047, except that the power to levy and 
collect taxes or special assessments is limited to the power 
provided in sections 469.027 to 469.033.  Its powers include the 
following powers in addition to others granted in sections 
469.001 to 469.047:  
    (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 469.001 to 469.047;  
    (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 469.026, 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 
469.003 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 469.001 to 469.047 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 469.001 to 469.047 
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 469.029, provided that the 
provisions of section 469.029 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 469.033 or by means of 
contributions from the municipality provided for in section 
469.041, 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 hazardous buildings as defined in 
section 463.15, subdivision 3, or 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 469.001 to 469.047;  
    (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 469.001 to 469.047 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 469.001 to 469.047, 
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 reconvey 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 or in the manner and subject to 
the conditions provided in section 475.66 for the deposit and 
investment of debt service funds; 
    (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 469.001 to 
469.047 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 469.001 to 469.047;  
    (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 469.029, 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 469.029, 
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 469.041, 
clause (5). 
    Sec. 4.  Minnesota Statutes 1987 Supplement, section 
469.015, subdivision 4, is amended to read:  
    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.  In exercising, 
pursuant to any general or special law, any power under chapter 
469, an authority need not require competitive bidding with 
respect to a structured parking facility constructed in 
conjunction with, and directly above or below, a development and 
financed with the proceeds of tax increment or parking ramp 
revenue bonds.  An authority need not require competitive 
bidding in the case of a housing development project that (1) is 
financed with the proceeds of bonds secured by the project and 
to which the full faith and credit of the authority is not 
pledged; (2) is located on land owned by the authority; (3) is 
constructed or rehabilitated under agreements with a developer 
for the construction of the project, guarantee of the bonds, and 
management of the property; and (4) is found by the authority to 
require negotiation rather than use of a competitive bidding 
procedure to be economical and feasible.  
    Sec. 5.  Minnesota Statutes 1987 Supplement, section 
469.071, is amended by adding a subdivision to read: 
    Subd. 5.  [EXCEPTION; PARKING FACILITIES.] Notwithstanding 
section 469.068, the Bloomington port authority need not require 
competitive bidding with respect to a structured parking 
facility constructed in conjunction with, and directly above or 
below, or adjacent and integrally related to, a development and 
financed with the proceeds of tax increment or revenue bonds.  
    Sec. 6.  Minnesota Statutes 1987 Supplement, section 
469.155, subdivision 12, is amended to read:  
    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 
469.152 to 469.165, and interest on them.  The municipality may 
issue revenue bonds to refund, in whole or in part, bonds 
previously issued by any other municipality or redevelopment 
agency on behalf of an organization described in section 
501(c)(3) of the Internal Revenue Code of 1986, as amended 
through December 31, 1986, under authority of sections 474.01 to 
474.13, and interest on them, but only with the consent of the 
original issuer of such bonds.  The municipality may issue and 
sell warrants which give to their holders the right to purchase 
refunding bonds issuable under this subdivision prior to a 
stipulated date.  The warrants are not required to be sold at 
public sale and all or any agreed portion of the proceeds of the 
warrants may be paid to the contracting party under the revenue 
agreement required by subdivision 5 or to its designee under the 
conditions the municipality shall agree upon.  Warrants shall 
not be issued which obligate a municipality to issue refunding 
bonds that are or will be subject to federal tax law as defined 
in section 474A.02, subdivision 8.  The warrants may provide a 
stipulated exercise price or a price that depends on the tax 
exempt status of interest on the refunding bonds at the time of 
issuance.  The average interest rate on refunding bonds issued 
to refund fixed rate bonds shall not exceed the average interest 
rate on fixed rate bonds to be refunded.  The municipality may 
appoint a bank or trust company to serve as agent for the 
warrant holders and enter into agreements deemed necessary or 
incidental to the issuance of the warrants.  
    Sec. 7.  [469.1651] [REVENUE ANTICIPATION NOTES FOR 
HOSPITALS.] 
    Subdivision 1.  [AUTHORIZATION.] Prior to August 1, 1990, a 
municipality may issue and sell, at public or private sale, 
negotiable notes or certificates of indebtedness, as provided in 
this section and lend the proceeds to nonprofit hospitals in 
anticipation of revenues or state and federal aids payable to 
the hospitals within one year after the date of issue of the 
notes or certificates of indebtedness.  The principal amount of 
the notes or certificates shall not exceed 75 percent of the 
accounts receivable and third-party reimbursement payments 
payable to the hospital as of a date within 45 days of the date 
of issuance.  While notes or certificates issued under this 
section on behalf of a hospital are outstanding, additional 
notes or certificates shall not be issued unless, for the period 
of 30 consecutive days immediately preceding the date of 
issuance, the amount of outstanding notes and certificates was 
less than six percent of the hospital's gross revenues for the 
preceding fiscal year.  
    The municipality need not comply with the procedures set 
forth in sections 469.152 to 469.165 in the issuance of notes or 
certificates of indebtedness pursuant to this section, but the 
municipality shall comply with sections 469.152 to 469.165 at 
the time of issuance of the refunding obligations if long-term 
obligations are issued to refund notes or certificates of 
indebtedness issued pursuant to this section. 
    Subd. 2.  [REVENUE AGREEMENT.] No notes or certificates of 
indebtedness shall be issued pursuant to this section unless the 
municipality has entered into a revenue agreement with a 
qualifying hospital providing for payment by the hospital of all 
principal of and interest on the notes or certificates of 
indebtedness when they become due and payable, together with any 
expenses and fees of the municipality incurred in connection 
with the notes or their issuance.  Notes and certificates of 
indebtedness issued under authority of this section do not, and 
shall state that they do not, represent or constitute a debt or 
pledge of the faith and credit of the municipality or the state 
of Minnesota, or grant to their owners or holders any right to 
have the municipality or state levy any taxes or appropriate any 
funds for the payment of their principal or interest on them.  
The notes or certificates are payable and shall state that they 
are payable solely from the revenues and other property, income, 
accounts, charges, and money that are pledged for their payment 
in accordance with the proceedings authorizing their issuance.  
    Subd. 3.  [ENABLING RESOLUTION; FORM OF CERTIFICATES.] The 
municipality may authorize and effect the borrowing and issue 
the notes or certificates of indebtedness authorized by this 
section upon passage of a resolution specifying the amount and 
purposes of the borrowing.  The municipality shall fix the 
amount, date, maturity, form, denomination, and other details of 
the notes or certificates of indebtedness, consistent with this 
section, and shall fix the date and place for the receipt of 
bids for their purchase, if the notes or certificates of 
indebtedness are to be sold by public sale.  
    Subd. 4.  [REPAYMENT; MATURITY DATE; INTEREST.] The 
proceeds of revenues and future state and federal aid and other 
funds of the hospital which may become available shall be 
applied to the extent necessary to repay the notes or 
certificates of indebtedness.  The full faith and credit of the 
hospital, or any other lawfully pledged security of the 
hospital, as deemed necessary by the municipality, shall be 
pledged to their payment.  Notes or certificates of indebtedness 
issued pursuant to this section shall mature not later than 13 
months after the date of issue.  The notes or certificates shall 
be sold at such price as the municipality may agree.  The notes 
or certificates shall bear interest after maturity until paid at 
the rate they bore before maturity.  Any interest accruing 
before or after maturity shall be paid from any available funds 
of the hospital.  
    Any note or certificate of indebtedness issued pursuant to 
this section may be issued giving its owner the right to tender, 
or the municipality or the hospital to demand tender of, the 
obligation to the municipality or the hospital or another person 
designated by either of them, for purchase at a specified time 
or times.  The note or certificate of indebtedness shall not be 
deemed to mature on any tender date, and the purchase of a 
tendered note or certificate shall not be deemed a payment or 
discharge of the note or certificate.  Notes or certificates of 
indebtedness tendered for purchase may be remarketed by or on 
behalf of the municipality or any other purchaser.  The 
municipality or the hospital may enter into agreements deemed 
appropriate to provide for the purchase and remarketing of 
tendered notes or certificates of indebtedness, including 
provisions under which undelivered obligations may be deemed 
tendered for purchase and new obligations may be substituted for 
them, provisions for the payment of charges of tender agents, 
remarketing agents, and financial institutions extending lines 
of credit or letters of credit assuring repurchase, and for 
reimbursement of advances under letters of credit, which charges 
and reimbursements shall be paid by the hospital.  
    Any notes or certificates of indebtedness issued pursuant 
to this section may bear interest at a rate varying periodically 
at the time or times and on the terms, including convertibility 
to a fixed rate of interest, determined by the governing body of 
the municipality. 
    Subd. 5.  [TRUST AGREEMENT.] Any notes or certificates of 
indebtedness issued under this section may be secured by a trust 
agreement between the municipality and a corporate trustee, 
which may be any trust company or bank having the powers of a 
trust company within the state.  The trust agreement or the 
resolution providing for the issuance of the notes or 
certificates may pledge or assign the revenues to be received, 
the proceeds of any contracts pledged, and any other property 
pledged by the hospital or proceeds from it.  The trust 
agreement or resolution providing for the issuance of the notes 
or certificates may contain reasonable provisions to protect and 
enforce the rights and remedies of the holders of the notes or 
certificates.  Any bank or trust company incorporated under the 
laws of the state that may act as depository of the proceeds of 
notes or certificates or of revenues or other moneys may furnish 
the indemnifying bonds or pledge the securities that may be 
required by the municipality.  The trust agreement may set forth 
the rights and remedies of the holders of the notes or 
certificates and of the trustee and may restrict the individual 
right of action by holders of the notes or certificates.  The 
trust agreement or resolution may contain any other provisions 
that the municipality deems reasonable for the security of the 
holders of the notes or certificates.  All expenses incurred in 
carrying out the provisions of the trust agreement or resolution 
shall be paid by the hospital. 
     Subd. 6.  [REPORT.] Within 30 days after issuance of notes 
or certificates under this section, a municipality must report 
to the commissioner of health on the issuance.  The report must 
include the name and location of the institution, the principal 
amount of the note or certificate, and its maturity date. 
    Sec. 8.  Minnesota Statutes 1987 Supplement, section 
474A.04, subdivision 6, is amended to read:  
    Subd. 6.  [ENTITLEMENT TRANSFERS.] An entitlement issuer 
may enter into an agreement with another entitlement issuer 
whereby the recipient entitlement issuer issues obligations 
pursuant to bonding authority allocated to the original 
entitlement issuer under this section.  An entitlement issuer 
may enter into an agreement with an issuer which is not an 
entitlement issuer whereby the recipient issuer issues qualified 
mortgage bonds, up to $100,000 of which are issued pursuant to 
bonding authority allocated to the original entitlement issuer 
under this section.  The agreement may be approved and executed 
by the mayor of the entitlement issuer with or without approval 
or review by the city council. 
    Sec. 9.  Minnesota Statutes 1987 Supplement, section 
475.54, subdivision 1, is amended to read:  
    Subdivision 1.  Except as provided in subdivision 3, 5a, 15 
or 5b 17, or as expressly authorized in another law, all 
obligations of each issue shall mature or be subject to 
mandatory sinking fund redemption in installments, the first not 
later than three years and the last not later than 30 years from 
the date of the issue.  No amount of principal of the issue 
payable in any calendar year shall exceed five times the amount 
of the smallest amount payable in any preceding calendar year 
ending three years or more after the issue date.  
    Sec. 10.  Minnesota Statutes 1986, section 475.54, is 
amended by adding a subdivision to read: 
    Subd. 17.  Obligations payable primarily from a source 
other than ad valorem taxes may mature at any time or times 
within 30 years after the date of issue, if the governing body 
estimates that the primary source of payment is sufficient to 
pay when due the principal of and interest on the obligations 
and if the primary source of payment is irrevocably appropriated 
to payment of the obligations. 
    Sec. 11.  Minnesota Statutes 1986, section 475.60, 
subdivision 3, is amended to read:  
    Subd. 3.  [PUBLISHED NOTICE.] Published notice, where 
required, shall specify the maximum principal amount of the 
obligations, the place of receipt and consideration of bids and 
such other details as to the obligations and terms of sale as 
the governing body deems suitable.  The published notice shall 
either specify the date and time for receipt of bids or provide 
that the bids will be received at a date and time not less than 
ten nor more than 45 60 days after the date of publication.  If 
the published notice does not state the specific date and or 
amount for the sale, it shall specify the manner in which notice 
of the date and or amount of the sale will be given to 
prospective bidders.  Notification of prospective bidders shall 
be given by electronic data transmission or other form of 
communication common to the municipal bond trade at least four 
days (omitting Saturdays, Sundays, and legal holidays) before 
the date for receipt of bids.  If within five days after the 
date of publication a prospective bidder requests in writing to 
be notified by mail, the municipality shall do so.  Failure to 
give the notice as described in the preceding sentence to a 
bidder shall not affect the validity of the sale or of the 
obligations.  The governing body may employ an agent to receive 
and open the bids at any place within or outside the corporate 
limits of the municipality, in the presence of an officer of the 
municipality, but the obligations shall not be sold except by 
action of the governing body or authorized officers of the 
municipality after communication of the bids to them.  
Additional notice may be given for such time and in such manner 
as the governing body deems suitable.  At the time and place so 
fixed, the bids shall be opened and the offer complying with the 
terms of sale and deemed most favorable shall be accepted, but 
the governing body may reject any and all such offers, in which 
event, or if no offers have been received, it may award the 
obligations to any person who within 30 days thereafter presents 
an offer complying with the terms of sale and deemed more 
favorable than any received previously, or upon like notice the 
governing body may invite other bids upon the same or different 
terms and conditions, except that if the original published 
notice does not state the specific date or amount for the sale 
and if the material terms and conditions of the sale remain the 
same, except for the date and amount, notice of the date or 
amount may be given in the manner provided above. 
    Sec. 12.  Minnesota Statutes 1987 Supplement, section 
475.66, subdivision 3, is amended to read:  
    Subd. 3.  Subject to the provisions of any resolutions or 
other instruments securing obligations payable from a debt 
service fund, any balance in the fund may be invested 
    (a) in governmental bonds, notes, bills, mortgages, and 
other securities, which are direct obligations or are guaranteed 
or insured issues of the United States, its agencies, its 
instrumentalities, or organizations created by an act of 
Congress, 
    (b) in shares of an investment company (1) registered under 
the Federal Investment Company Act of 1940, whose shares are 
registered under the Federal Securities Act of 1933, and (2) 
whose only investments are in (i) securities described in the 
preceding clause and, (ii) general obligation tax-exempt 
securities rated A or better by a national bond rating service, 
and (iii) repurchase agreements or reverse repurchase agreements 
fully collateralized by those securities, if the repurchase 
agreements or reverse repurchase agreements are entered into 
only with those primary reporting dealers that report to the 
Federal Reserve Bank of New York and with the 100 largest United 
States commercial banks, 
    (c) in any security which is (1) a general obligation of 
the state of Minnesota or any of its municipalities or in 
general obligations of other state and local governments with 
taxing powers which are rated A or better by a national bond 
rating service, or (2) a general obligation of the Minnesota 
housing finance agency, or (3) a general obligation of a housing 
finance agency of any state if it includes a moral obligation of 
the state, provided that investments under this clause 
clauses (2) and (3) must be in obligations that are rated the 
highest or next highest rating given by Standard & Poor's 
Corporation or Moody's Investors Service, Inc., and investments 
under clause (3) may be made only (i) prior to August 1, 1990 
1991, and (ii) for a period of no more than three years from the 
date of purchase and further provided that investments under 
clauses (2) and (3) be determined to be expedient to reduce the 
amount of arbitrage rebate otherwise payable to the United 
States under section 148 of the Internal Revenue Code of 1986, 
    (d) in bankers acceptances of United States banks eligible 
for purchase by the Federal Reserve System, or 
    (e) in commercial paper issued by United States 
corporations or their Canadian subsidiaries that is of the 
highest quality and matures in 270 days or less, or 
    (f) in guaranteed investment contracts issued or guaranteed 
by United States commercial banks or domestic branches of 
foreign banks or United States insurance companies or their 
Canadian or United States subsidiaries; provided that the 
investment contracts rank on a parity with the senior unsecured 
debt obligations of the issuer or guarantor and, (1) in the case 
of long-term investment contracts, either (i) the long-term 
senior unsecured debt of the issuer or guarantor is rated, or 
obligations backed by letters of credit of the issuer or 
guarantor if forming the primary basis of a rating of such 
obligations would be rated, in the highest or next highest 
rating category of Standard & Poor's Corporation, Moody's 
Investors Service, Inc., or a similar nationally recognized 
rating agency, or (ii) if the issuer is a bank with headquarters 
in Minnesota, the long-term senior unsecured debt of the issuer 
is rated, or obligations backed by letters of credit of the 
issuer if forming the primary basis of a rating of such 
obligations would be rated in one of the three highest rating 
categories of Standard & Poor's Corporation, Moody's Investors 
Service, Inc., or similar nationally recognized rating agency, 
or (2) in the case of short-term investment contracts, the 
short-term unsecured debt of the issuer or guarantor is rated, 
or obligations backed by letters of credit of the issuer or 
guarantor if forming the primary basis or a rating of such 
obligations would be rated, in the highest two rating categories 
of Standard and Poor's Corporation, Moody's Investors Service, 
Inc., or similar nationally recognized rating agency. 
    The fund may also be used to purchase any obligation, 
whether general or special, of an issue which is payable from 
the fund, at such price, which may include a premium, as shall 
be agreed to by the holder, or may be used to redeem any 
obligation of such an issue prior to maturity in accordance with 
its terms.  The securities representing any such investment may 
be sold or hypothecated by the municipality at any time, but the 
money so received remains a part of the fund until used for the 
purpose for which the fund was created. 
    Sec. 13.  Minnesota Statutes 1987 Supplement, section 
475.67, subdivision 12, is amended to read:  
    Subd. 12.  In the refunding of general obligations, for 
which the full faith and credit of the issuing municipality has 
been pledged, the following additional conditions shall be 
observed:  each such obligation, if repayable, shall be called 
for redemption prior to its maturity in accordance with its 
terms no later than either (i) the earliest date on which it may 
be redeemed without payment of any premium, or (ii) if the 
obligation is only prepayable with payment of a premium, on the 
earliest date on which it may be redeemed with payment of the 
least premium required by its terms.  No refunding obligations 
shall be issued and sold more than six months before the 
refunded obligations mature or are called for redemption in 
accordance with their terms, unless either (i) as a result of 
the refunding the average life of the maturities is extended at 
least three years or (ii) as of the nominal date of the 
refunding obligations the present value of the dollar amount of 
the debt service on the refunding obligations, computed to their 
stated maturity dates, after deducting any premium or adding any 
discount, is lower by at least three percent than the present 
value of the dollar amount of debt service, on all general 
obligations refunded, exclusive of any premium or discount, 
computed to their stated maturity dates; provided that in 
computing the dollar amount of debt service on the refunding 
obligations, any expenses of the refunding payable from a source 
other than the proceeds of the refunding obligations or the 
interest derived from the investment thereof shall be added to 
the dollar amount of debt service on the refunding obligations.  
For purposes of this subdivision, the present value of the 
dollar amount of debt service means the dollar amount of debt 
service to be paid, discounted to the nominal date of the 
refunding obligations at a rate equal to the yield on the 
refunding obligations.  Expenses of the refunding include the 
amount, if any, in excess of the proceeds of the refunding 
obligations or the principal amount of obligations to be 
refunded, whichever is the greater, which is required to be 
deposited in escrow to provide cash and purchase securities 
sufficient to retire the refunded obligations and unaccrued 
interest thereon in accordance with subdivision 6; charges of 
the escrow agent and of the paying agent for the refunding 
obligations; and expenses of printing and publications and of 
fiscal, legal, or other professional service necessarily 
incurred in the issuance of the refunding obligations. 
    Sec. 14.  Minnesota Statutes 1986, section 475.67, 
subdivision 13, is amended to read:  
    Subd. 13.  Crossover refunding obligations may be issued by 
a municipality without regard to the limitations in subdivisions 
4 to 10.  The proceeds of crossover refunding obligations, less 
any proceeds applied to payment of the costs of their issuance, 
shall be deposited in a debt service fund irrevocably 
appropriated to the payment of principal of and interest on the 
refunding obligations until the date the proceeds are applied to 
payment of the obligations to be refunded.  The debt service 
fund shall be maintained as an escrow account with a suitable 
financial institution within or without the state and amounts in 
it shall be invested in securities described in subdivision 8 or 
in an investment contract or similar agreement with a bank or 
insurance company meeting the requirements of section 475.66, 
subdivision 3, clause (f).  Excess proceeds, if any, of the tax 
levy pursuant to section 475.61, subdivision 1, made with 
respect to the obligations to be refunded, and any other 
available amounts, may be deposited in the escrow account.  In 
the resolution authorizing the issuance of crossover refunding 
obligations, the governing body may pledge to their payment any 
source of payment of the obligations to be refunded.  The 
resolution may provide that the refunding obligations are 
payable solely from the escrow account prior to the date 
scheduled for payment of the obligations to be refunded and that 
the obligations to be refunded shall not be discharged if the 
amounts on deposit in the escrow account on that date are 
insufficient.  Subdivisions 11 and 12 shall not apply to any 
crossover refunding obligations, or the obligations to be 
refunded.  Subject to section 475.61, subdivision 3, in the case 
of general obligation bonds, taxes shall be levied pursuant to 
section 475.61 and appropriated to the debt service fund in the 
amounts needed, together with estimated investment income of the 
debt service fund and any other revenues available upon 
discharge of the obligations refunded, to pay when due the 
principal of and interest on the refunding obligations.  The 
levy so imposed may be reduced by earnings to be received from 
investments on hand in the debt service fund to the extent the 
applicable recording officer certifies to the county auditor 
that the earnings are expected to be received in amounts and at 
such times as to be sufficient, together with the remaining 
levy, to satisfy the purpose of the levy requirements under 
section 475.61. 
    Sec. 15.  [471.9981] [COUNTIES AND CITIES; PAY EQUITY COMPLIANCE.] 
    Subdivision 1.  [1988 REPORT.] A home rule charter or 
statutory city or county, referred to in this section as a 
"governmental subdivision," that employs ten or more people and 
that did not submit a report according to Minnesota Statutes, 
section 471.998, shall submit the report by October 1, 1988, to 
the commissioner of employee relations. 
    The plan for implementing equitable compensation for the 
employees must provide for complete implementation not later 
than December 31, 1991, unless a later date has been approved by 
the commissioner.  If a report was filed before October 1, 1987, 
and had an implementation date after December 31, 1991, the date 
in the report shall be approved by the commissioner.  The plan 
need not contain a market study. 
     Subd. 2.  [PENALTY FOR NONCOMPLIANCE.] Notwithstanding 
Minnesota Statutes, sections 275.50 to 275.56, for taxes levied 
in 1988, payable in 1989 only, a governmental subdivision that 
does not submit the report required in subdivision 1 shall be 
subject to the levy limits provided in subdivisions 3 to 5. 
     Subd. 3.  [CITIES.] For a home rule charter or statutory 
city, the levy limit base for taxes payable in 1989 is the sum 
of (1) the city's total levy for taxes payable in 1988, 
excluding the amount levied in that year for debt service and 
the amount for unfunded accrued pension liabilities under Laws 
1987, chapter 268, article 5, section 12, subdivision 4, clause 
(2); and (2) the amount received in 1988 as described in 
Minnesota Statutes, section 275.51, subdivision 3i.  This sum 
shall be increased by a percentage equal to the greater of the 
percentage increases in population or in number of households, 
if any, for the most recent 12-month period for which data is 
available, using figures derived under Minnesota Statutes, 
section 275.51, subdivision 6.  The resulting amount for the 
home rule charter or statutory city multiplied by 103 percent is 
the city's levy limit base for taxes payable in 1989.  The 
payable 1989 levy limitation for the city shall be equal to the 
levy limit base determined under this section reduced by the 
aids for 1989 enumerated in Minnesota Statutes, section 275.51, 
subdivision 3i. 
     Subd. 4.  [COUNTIES.] For a county, the levy limit base for 
taxes payable in 1989 is the sum of (1) the county's total levy 
for taxes payable in 1988, excluding the amount levied in that 
year for (i) debt service; (ii) levied for unfunded accrued 
pension liabilities under Laws 1987, chapter 268, article 5, 
section 12, subdivision 4, clause (2); (iii) income maintenance 
programs except for the administrative costs associated with 
those programs; and (iv) social services programs, including the 
administrative costs associated with those programs, plus (2) 
the amount received in 1988 as described in Minnesota Statutes, 
section 275.51, subdivision 3i.  This sum shall be increased by 
a percentage equal to the greater of the percentage increases in 
population or in number of households, if any, for the most 
recent 12-month period for which data is available, using 
figures derived under Minnesota Statutes, section 275.51, 
subdivision 6.  The resulting amount for the county multiplied 
by 103 percent is the county's levy limit base for taxes payable 
in 1989.  The payable 1989 levy limitation for the county shall 
be equal to the levy limit base determined under this section 
reduced by the aids for 1989 enumerated in section 275.51, 
subdivision 3i. 
    Subd. 5.  [EXCEPTIONS.] For taxes payable in 1989, the 
amounts levied for the following costs are not subject to the 
limitation under subdivision 3 or 4: 
     (1) levies for debt service; 
     (2) levies for unfunded accrued pension liabilities as 
specified in Minnesota Statutes, section 275.50, subdivision 5, 
clause (o); 
     (3) levies for income maintenance programs, net of any aid 
payments received under Minnesota Statutes, section 273.1397, 
and excluding the administrative costs associated with those 
programs; and 
     (4) levies for social service programs including the 
administrative costs associated with those programs. 
     The amount levied by the county for taxes payable in 1989 
to pay the costs of programs described in clauses (3) and (4) of 
this subdivision shall be subject to the percentage limitations 
provided in Minnesota Statutes, section 275.50, subdivision 5, 
clause (d). 
     Subd. 6.  [PENALTY FOR FAILURE TO IMPLEMENT PLAN.] If the 
commissioner of employee relations finds, after notice and 
consultation with a governmental subdivision, that it has failed 
to implement its plan for implementing equitable compensation by 
December 31, 1991, or the later date approved by the 
commissioner the aid that would otherwise be payable to that 
governmental subdivision under Minnesota Statutes, sections 
477A.011 to 477A.014 in calendar year 1992 shall be reduced by 
five percent; provided that the reduction in aid shall apply to 
the first calendar year beginning after the date for 
implementation of the plan of a governmental subdivision for 
which the commissioner of employee relations has approved an 
implementation date later than December 31, 1991.  The 
commissioner may waive the penalty upon making a finding that 
the failure to implement was attributable to circumstances 
beyond the control of the governmental subdivision or to severe 
hardship.  
     Sec. 16.  [RAMSEY-WASHINGTON METRO WATERSHED DISTRICT 
ADMINISTRATIVE FUND.] 
     The Ramsey-Washington metro watershed district may annually 
levy an ad valorem tax not to exceed $200,000 on taxable 
property within the district for an administrative fund.  The 
district may levy more than $125,000 only with the approval of 
the Ramsey and Washington counties boards of commissioners.  The 
board of managers shall, in other respects, make the levy for 
the administrative fund in accordance with Minnesota Statutes, 
section 112.611. 
    Sec. 17.  [469.0721] [PORT AUTHORITY.] 
    Each of the cities of Cannon Falls and Redwood Falls may, 
by adoption of an enabling resolution in compliance with the 
procedural requirements of section 19, establish a port 
authority commission that, subject to section 18, has the same 
powers as a port authority established under Minnesota Statutes, 
section 458.09, or other law, and a housing and redevelopment 
authority established under Minnesota Statutes, chapter 462, or 
other law, and is an agency that may administer one or more 
municipal development districts under Minnesota Statutes, 
section 472A.10.  The port authority commission may exercise any 
of these powers within industrial development districts or 
within other property under the jurisdiction of the commission.  
The port authority commission may enter into agreements with 
nonprofit organizations or corporations, including, but not 
limited to, joint venture and limited partnership agreements, in 
order to carry out its purposes.  If a city establishes a port 
authority commission under this section, the city shall exercise 
all the powers in dealing with a port authority that are granted 
to a city by Minnesota Statutes, chapter 458, and all powers in 
dealing with a housing and redevelopment authority that are 
granted to a city by Minnesota Statutes, chapter 462, or other 
law. 
    Sec. 18.  [469.0722] [LIMITATION OF POWERS.] 
    Subdivision 1.  [IN THIS SECTION.] An enabling resolution 
may impose the limits listed in this section on the actions of 
the port authority of Cannon Falls or Redwood Falls. 
    Subd. 2.  [NOT USE SPECIFIED POWERS.] An enabling 
resolution may require that the port authority must not use 
specified powers contained in Minnesota Statutes, chapters 458 
and 462, or that the port authority must not use powers without 
the prior approval of the city council. 
    Subd. 3.  [TRANSFER RESERVES.] An enabling resolution may 
require the port authority to transfer a portion of the reserves 
generated by activities of the port authority that 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.  Reserves previously pledged by 
the port authority must not be transferred. 
    Subd. 4.  [BOND APPROVAL.] An enabling resolution may 
require that the sale of bonds or obligations other than general 
obligation tax supported bonds or obligations issued by the port 
authority be approved by the city council before issuance. 
    Subd. 5.  [BUDGET PROCESS.] An enabling resolution may 
require 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. 
    Subd. 6.  [LEVY APPROVAL.] An enabling resolution may 
require that the port authority must not levy a tax for its 
benefit without approval of the city council. 
    Subd. 7.  [CONSISTENT WITH CITY PLAN.] An enabling 
resolution may require that all official actions of the port 
authority must be consistent with the adopted comprehensive plan 
of the city, and official controls implementing the 
comprehensive plan. 
    Subd. 8.  [PROJECT APPROVAL.] An enabling resolution may 
require that the port authority submit to the city council for 
approval by resolution any proposed project as defined in 
Minnesota Statutes, section 273.73, subdivision 8. 
    Subd. 9.  [GOVERNMENTAL RELATIONS.] An enabling resolution 
may require 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. 
    Subd. 10.  [ADMINISTRATION; MANAGEMENT.] An enabling 
resolution may require that the port authority submit its 
administrative structure and management practices to the city 
council for approval. 
     Subd. 11.  [EMPLOYEE APPROVAL.] An enabling resolution may 
require that the port authority must not employ anyone without 
the approval of the city council. 
     Subd. 12.  [OTHER LIMITS.] An enabling resolution may 
impose any other limit or control established by the city 
council. 
    Subd. 13.  [MODIFICATIONS.] An enabling resolution may be 
modified at any time, subject to subdivision 16.  A modification 
must be made according to the procedural requirements of section 
19. 
    Subd. 14.  [MODIFICATION PROCEDURE.] Each year, within 60 
days of the anniversary date of the first adoption of the 
enabling resolution, the port authority shall submit a report to 
the city council stating whether and how it wishes the enabling 
resolution to 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 modification it considers appropriate.  A 
modification must be made according to the procedural 
requirements of section 19.  The petition requirement does not 
limit the right of the port authority to petition the city 
council at any time. 
    Subd. 15.  [COUNCIL ACTION CONCLUSIVE.] A determination by 
the city council that the limits imposed under this section have 
been complied with by the port authority is conclusive. 
    Subd. 16.  [NOT TO IMPAIR BONDS, CONTRACTS.] 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. 19.  [469.0723] [PROCEDURAL REQUIREMENT.] 
    (a) The creation of a port authority by the city of Cannon 
Falls or Redwood Falls must be by written resolution known as 
the enabling resolution.  Before 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 within 30 days before the public hearing. 
    (b) A modification 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. 20.  [469.0724] [GENERAL OBLIGATION BONDS.] 
    The port authority of Cannon Falls or Redwood Falls must 
not proceed with the sale of general obligation tax supported 
bonds until the city council by resolution approves the proposed 
issuance.  The resolution must be published in the official 
newspaper.  If, within 30 days after the publication, a petition 
signed by voters equal in number to ten percent of the number of 
voters at the last regular city election is filed with the city 
clerk, the city and port authority must not issue the general 
obligation tax supported bonds until the proposition has been 
approved by a majority of the votes cast on the question at a 
regular or special election. 
    Sec. 21.  [469.0725] [NAME.] 
    The city of Cannon Falls or Redwood Falls may choose the 
name of its port authority commission.  
    Sec. 22.  [469.0726] [REMOVAL OF COMMISSIONERS FOR CAUSE.] 
    A commissioner of the port authority of Cannon Falls or 
Redwood Falls may be removed by the city council for 
inefficiency, neglect of duty, or misconduct in office.  A 
commissioner may 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.  
After the charges have been submitted to a commissioner, the 
city council may temporarily suspend the commissioner.  If the 
city council finds that the 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, must be filed in the office of 
the city clerk. 
    Sec. 23.  [LOCAL APPROVAL.] 
    Sections 17 to 22 are effective for the city of Cannon 
Falls the day after the city complies with Minnesota Statutes, 
section 645.021, subdivision 3. 
    Sections 17 to 22 are effective for the city of Redwood 
Falls the day after the city complies with Minnesota Statutes, 
section 645.021, subdivision 3. 
    Sec. 24.  [REPEALER.] 
    Laws 1987, chapter 358, section 31, is repealed. 
    Sec. 25.  [EFFECTIVE DATE.] 
    Sections 2, 9, 10, and 13 are effective May 15, 1988.  
Sections 4, 8, 12, and 14 are effective the day following final 
enactment.  Section 16 is effective for taxes levied in 1988, 
payable in 1989, and thereafter. 
    Approved April 28, 1988