Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 342-S.F.No. 1179 
           An act relating to public finance; providing 
          conditions and requirements for the issuance of debt 
          and for the financial obligations of authorities; 
          requiring a debt capacity forecast; modifying 
          provisions relating to budget preparation; validating 
          the sale of certain school district bonds; exempting 
          certain construction loans from the mortgage registry 
          tax; amending Minnesota Statutes 1990, sections 
          16A.11, subdivisions 1, 3, and by adding subdivisions; 
          400.101; 429.061, subdivision 3; 447.49; 469.014; 
          469.155, subdivision 12; 473.811, subdivision 2; 
          475.58, subdivision 2; 475.60, subdivision 2; 475.66, 
          subdivision 3; and 475.67, subdivision 3; proposing 
          coding for new law in Minnesota Statutes, chapters 
          16A, 16B, 462C, and 469. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [16A.105] [DEBT CAPACITY FORECAST.] 
    By January 14 of each odd-numbered year the governor shall 
submit to the legislature a debt capacity forecast.  The debt 
capacity forecast must include statements of the indebtedness of 
the state for bonds, notes, and other forms of long-term 
indebtedness that are not accounted for in proprietary or 
fiduciary funds, including general obligation bonds, moral 
obligation bonds, revenue bonds, loans, grants payable, and 
capital leases.  The forecast must show the actual amount of the 
debt service for at least the past two completed fiscal years, 
and the estimated amount for the current fiscal year and the 
next six fiscal years, the debt authorized and unissued, the 
condition of the sinking funds, and the borrowing capacity for 
the next six fiscal years. 
    Sec. 2.  Minnesota Statutes 1990, section 16A.11, 
subdivision 1, is amended to read: 
    Subdivision 1.  [WHEN.] The governor shall submit a 
two-part three-part budget to the legislature.  Parts one and 
two, the budget message and detailed operating budget, must be 
submitted by the fourth Monday in January in each odd-numbered 
year.  It shall include Part three, the detailed recommendations 
as to capital expenditure, but they need not be submitted until 
April June 15. 
    Sec. 3.  Minnesota Statutes 1990, section 16A.11, 
subdivision 3, is amended to read: 
    Subd. 3.  [PART TWO:  DETAILED BUDGET.] Part two of the 
budget, the detailed budget estimates both of expenditures and 
revenues, shall also include statements of the bonded 
indebtedness of the state, showing the actual amount of the debt 
service for at least the past two completed fiscal years, and 
the estimated amount for the current fiscal year and for the 
next two fiscal years, the debt authorized and unissued, the 
condition of the sinking funds, and the borrowing capacity.  It 
shall also contain any statements on the financial plan which 
the governor believes desirable or which may be required by the 
legislature.  The detailed estimates shall include the budget 
request of each agency arranged in tabular form so it may 
readily be compared with the governor's budget for each agency.  
They shall also include, as part of each agency's organization 
chart, a summary of the personnel employed by the agency, 
showing the complement approved by the legislature for the 
current biennium, additional complement positions authorized 
through the governor or the commissioner, positions transferred 
into or out of the agency, additional part-time and seasonal 
positions and the number of employees of all kinds employed by 
the agency on June 30 of the last complete fiscal year.  The 
summary of the number of employees must list employees by 
employment status, including but not limited to full-time 
unlimited, part-time unlimited, full-time or part-time seasonal, 
intermittent, full-time or part-time temporary, full-time or 
part-time emergency, and other.  The summary of personnel shall 
also be shown for each functional division of the agency, and 
for each fund and type of appropriation.  
     Any increase in complement with the exception of federal 
positions, approved by the commissioner of finance as temporary 
positions, shall be reflected in the governor's budget 
recommendations to the legislature as change request items.  
These positions are not permanent positions until the 
legislature has approved the change request items.  
    Sec. 4.  Minnesota Statutes 1990, section 16A.11, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [PART THREE:  DETAILED CAPITAL BUDGET.] The 
detailed capital budget must include recommendations for capital 
projects to be funded during the next six fiscal years.  It must 
be submitted with projects rank ordered in two ways:  in order 
of importance among all budget projects as determined by the 
governor, and in order of importance among that agency's 
requests as determined by the agency originating the request. 
    Sec. 5.  Minnesota Statutes 1990, section 16A.11, is 
amended by adding a subdivision to read: 
    Subd. 5.  [CAPITAL FACILITIES NOTE.] The commissioner shall 
prepare a facilities note on each capital project, estimating 
program cost impacts and efficiencies stemming from the approval 
of that project.  
    Sec. 6.  [16B.305] [CAPITAL BUDGET REQUESTS.] 
    Subdivision 1.  [ARCHITECTURAL AND COST STANDARDS.] The 
commissioner shall discuss various architectural and cost 
standards with experts from the public and private sector and 
recommend the use of appropriate design and cost standards for 
all capital budget requests. 
    Subd. 2.  [REVIEW OF REQUESTS.] The commissioner shall 
review agency requests for state buildings and help agencies 
prepare adequate plans for use in presenting their capital 
budget requests to the commissioner of finance, the governor, 
and the legislature.  The commissioner shall consider locational 
questions in siting state buildings and include answers to 
locational questions in the commissioner's recommendations on a 
request. 
    Subd. 3.  [CONSULTATION REQUIRED.] State agencies and other 
public bodies considering capitol area projects shall consult 
with the capitol area architectural and planning board before 
developing plans for capital improvements or capital budget 
proposals for submission to the legislature and governor.  The 
board shall provide to the governor and legislature a statement 
as to the request's impact upon the capitol area and its 
compatibility with the comprehensive plan for the capitol area.  
    Sec. 7.  Minnesota Statutes 1990, section 400.101, is 
amended to read: 
    400.101 [BONDS.] 
    The county, by resolution, may authorize the issuance of 
bonds to provide funds for the acquisition or betterment of 
solid waste facilities, closure, postclosure, and contingency 
costs, related transmission facilities, or property or property 
rights for the facilities, for responses, as defined in section 
115B.02, to releases from closed solid waste facilities, or for 
refunding any outstanding bonds issued for any such purpose, and 
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 or 
charges to be derived from any facility operated by or for the 
county, or any combination thereof.  The proceeds of bonds 
issued under this section for closure, postclosure, and 
contingency costs and noncapital responses to releases may be 
used only for solid waste facilities in existence on May 15, 
1989.  Except as otherwise provided in this section, the bonds 
must be issued and sold in accordance with the provisions of 
chapter 475.  The proceeds of the bonds may be used in part to 
establish a reserve as further security for the payment of the 
principal and interest of the bonds when due.  Bonds issued 
under this section may be sold at public or private sale upon 
conditions that the county board determines, but any bonds 
issued after May 22, 1991, to which the full faith and credit 
and taxing powers of the county are pledged must be sold in 
accordance with the provisions of chapter 475.  No election is 
required to authorize the issuance of bonds under this section. 
    Sec. 8.  Minnesota Statutes 1990, section 429.061, 
subdivision 3, is amended to read: 
    Subd. 3.  [TRANSMITTED TO AUDITOR, PREPAYMENT.] After the 
adoption of the assessment, the clerk shall transmit a certified 
duplicate of the assessment roll with each installment, 
including interest, set forth separately to the county auditor 
of the county to be extended on the proper tax lists of the 
county; but in lieu of such certification, the council may in 
its discretion direct the clerk to file all assessment rolls in 
the clerk's office and to certify annually to the county 
auditor, on or before October 10 November 30 in each year, the 
total amount of installments of and interest on assessments on 
each parcel of land in the municipality which are to become due 
in the following year.  If any installment and interest has not 
been so certified prior to the year when it is due, the clerk 
shall forthwith certify the same to the county auditor for 
collection in the then succeeding year; and if the municipality 
has issued improvement warrants to finance the improvement, it 
shall pay out of its general funds into the fund of the 
improvement interest on the then unpaid balance of the 
assessment for the year or years during which the collection of 
such installment is postponed.  All assessments and interest 
thereon shall be collected and paid over in the same manner as 
other municipal taxes.  The owner of any property so assessed 
may, at any time prior to certification of the assessment or the 
first installment thereof to the county auditor, pay the whole 
of the assessment on such property, with interest accrued to the 
date of payment, to the municipal treasurer, except that no 
interest shall be charged if the entire assessment is paid 
within 30 days from the adoption thereof; and, except as 
hereinafter provided, the owner may at any time prior to 
November 15 of any year, prepay to the treasurer of the 
municipality having levied said assessments, the whole 
assessment remaining due with interest accrued to December 31 of 
the year in which said prepayment is made.  If the assessment 
roll is retained by the municipal clerk, the installment and 
interest in process of collection on the current tax list shall 
be paid to the county treasurer and the remaining principal 
balance of the assessment, if paid, shall be paid to the 
municipal treasurer.  The council may by ordinance authorize the 
partial prepayment of assessments, in such manner as the 
ordinance may provide, prior to certification of the assessment 
or the first installment thereof to the county auditor.  
    Sec. 9.  Minnesota Statutes 1990, section 447.49, is 
amended to read: 
     447.49 [MISCELLANEOUS PROVISIONS.] 
     Bonds issued under sections 447.45 to 447.50 must be issued 
and sold as provided in chapter 475.  If the bonds do not pledge 
the credit of the county, city, or hospital district as provided 
in section 447.48, the governing body may negotiate their sale 
without advertisement for bids.  They shall not be included in 
the net debt of any municipality, and are not subject to 
interest rate limitations, as defined or referred to in sections 
475.51 and 475.55.  If the bonds do not pledge the credit of the 
county, city, or hospital district as provided in section 447.48 
and are payable from rental payments to be made under a lease 
agreement entered into pursuant to section 447.47, the county, 
city, or hospital district may invest or deposit, or authorize a 
trustee to invest or deposit, any proceeds of the bonds, rental 
payments, and income from the investment of them, in any manner 
and upon any terms and conditions agreed to by the lessee under 
the lease agreement, resolution, or indenture, notwithstanding 
chapter 118 or section 471.56 or 475.66, but subject to any 
statutory provisions that govern the deposit and investment of 
funds of a lessee which is itself a governmental subdivision or 
agency.  
     Sec. 10.  [462C.14] [HOUSING PROGRAM AND DEVELOPMENTAL 
FINANCIAL SERVICES.] 
    Subdivision 1.  [AUTHORIZATION TO PROVIDE SERVICES.] A 
city, as defined in section 462C.02, subdivision 6, may provide 
housing program and development financial services, including 
mortgage banking services, for housing financed or assisted 
under a housing program of the city.  The services provided by 
the city may include all housing program and development 
financial services, including origination of loans or other 
indebtedness, administration and servicing of loans or other 
indebtedness, arranging for mortgage insurance from private or 
public sources, and other related services.  For this purpose, 
the city may exercise any of the powers relating to housing or 
housing finance provided in this section and the powers of a 
city under chapter 462C, a housing and redevelopment authority 
under chapter 469, or the Minnesota housing finance agency under 
chapter 462A.  Housing program and development financial 
services provided by the city are determined to be for the 
public purpose of ensuring an adequate supply of affordable, 
decent, safe, and sanitary housing.  A city may form a 
corporation under chapter 302A or 317A controlled by the city 
and delegate to it the power to exercise the powers granted to 
the city by this section. 
    Subd. 2.  [BOUNDARY LIMITATIONS.] A city may provide 
housing program and development financial services only within 
its corporate boundaries, except to the extent that a joint 
powers agreement or contract authorizes a city to provide the 
services within the boundaries of another city or within the 
jurisdiction of a state agency. 
    Subd. 3.  [JOINT ACTION.] Two or more cities, or housing 
and redevelopment authorities or port authorities authorized to 
exercise the powers of a city under chapter 462C, or a joint 
powers board formed by them, may act jointly pursuant to section 
471.59 and this section or may delegate the exercise of their 
powers under this section to a corporation controlled by them.  
A city as defined in section 462C.02, subdivision 6, or other 
political subdivision or state agency may contract with the city 
or a joint powers board or a corporation for housing program and 
development financial services for housing. 
    Subd. 4.  [OBLIGATIONS.] The city may issue bonds or other 
obligations and apply their proceeds for any proper purpose of 
the city or a corporation formed by the city relating to housing 
program and development financial services.  Bonds or other 
obligations issued for a specific program or development shall 
be issued only in accordance with sections 462C.01 to 462C.07 to 
the extent required by section 462C.08.  Bonds or obligations 
issued for financial services purposes may be sold at public or 
private sale, without an election, on the terms and conditions 
the city shall determine.  For that purpose, the city may 
exercise any of the powers that a housing and redevelopment 
authority may exercise under chapter 469, or the Minnesota 
housing finance agency may exercise under chapter 462A, in 
either case without limitation under the provisions of chapter 
475.  The city or corporation may purchase real or personal 
property used or useful for housing program or development 
financial services under an installment contract, or lease real 
or personal property with an option to purchase under a lease 
purchase agreement.  The city may issue bonds or other 
obligations secured by obligations under an installment contract 
or lease, in the manner provided in this section for other bonds 
or obligations issued for financial services purposes. 
    Sec. 11.  Minnesota Statutes 1990, section 469.014, is 
amended to read: 
    469.014 [LIABLE IN CONTRACT OR TORT.] 
    Subject to the provisions of chapter 466, 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. 12.  [469.0521] [LIABLE IN CONTRACT OR TORT.] 
    Subject to the provisions of chapter 466, a port authority 
shall be liable in contract or in tort in the same manner as a 
private corporation.  The commissioners of a port 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 a port authority shall not be subject to 
attachment, or to levy and sale on execution, but, if a port 
authority refuses to pay a judgment entered against it in any 
court of competent jurisdiction, the district court for the 
county in which the port authority is situated may, by writ of 
mandamus, direct the treasurer of the authority to pay the 
judgment from any unencumbered funds available for that purpose. 
    Sec. 13.  [469.1081] [LIABLE IN CONTRACT OR TORT.] 
    Subject to the provisions of chapter 466, 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 from any 
unencumbered funds available for that purpose. 
    Sec. 14.  Minnesota Statutes 1990, 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 or 
redevelopment agency 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 1990, under authority of 
sections 469.152 to 469.155, and interest on them, but only with 
the consent of the original issuer of such bonds.  The 
municipality or redevelopment agency 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 or redevelopment agency shall agree 
upon.  Warrants shall not be issued which obligate a 
municipality or redevelopment agency 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 upon the exercise of the warrants 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. 15.  Minnesota Statutes 1990, section 473.811, 
subdivision 2, is amended to read: 
    Subd. 2.  [COUNTY FINANCING OF FACILITIES.] Each 
metropolitan county may by resolution authorize the issuance of 
bonds to provide funds for the acquisition or betterment of 
solid waste facilities, closure, postclosure, and contingency 
costs, related transmission facilities, or property or property 
rights for the facilities, for responses, as defined in section 
115B.02, to releases from closed solid waste facilities, or for 
refunding any outstanding bonds issued for any such purpose.  
The proceeds of bonds issued under this section for closure, 
postclosure, and contingency costs and noncapital responses to 
releases may be used only for solid waste facilities in 
existence on May 15, 1989.  The county 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 or charges to be derived from any 
facility operated by or for the county, or any combination 
thereof.  Taxes levied for the payment of the bonds and interest 
shall not reduce the amounts of other taxes which the county is 
authorized by law to levy.  The proceeds of the bonds may be 
used in part to establish a reserve as further security for the 
payment of the principal and interest of the bonds when due.  
Bonds issued pursuant to this section may be sold at public or 
private sale upon such conditions as the county board shall 
determine, but any bonds issued after May 22, 1991, to which the 
full faith and credit and taxing powers of the county are 
pledged shall be sold in accordance with the provisions of 
chapter 475.  No election shall be required to authorize the 
issuance of the bonds.  Except as otherwise provided, the bonds 
shall be issued and sold in accordance with the provisions of 
chapter 475. 
    Sec. 16.  Minnesota Statutes 1990, section 475.58, 
subdivision 2, is amended to read: 
    Subd. 2.  [FUNDING, REFUNDING.] Any county, city, town, or 
school district whose outstanding gross debt, including all 
items referred to in section 475.51, subdivision 4, exceed in 
amount 1.62 percent of its market value may issue bonds under 
this subdivision for the purpose of funding or refunding such 
indebtedness or any part thereof.  A list of the items of 
indebtedness to be funded or refunded shall be made by the 
recording officer and treasurer and filed in the office of the 
recording officer.  The initial resolution of the governing body 
shall refer to this subdivision as authority for the issue, 
state the amount of bonds to be issued and refer to the list of 
indebtedness to be funded or refunded.  This resolution shall be 
published once each week for two successive weeks in a legal 
newspaper published in the municipality or if there be no such 
newspaper, in a legal newspaper published in the county seat.  
Such bonds may be issued without the submission of the question 
of their issue to the electors unless within ten days after the 
second publication of the resolution a petition requesting such 
election signed by ten or more voters who are taxpayers of the 
municipality, shall be filed with the recording officer.  In 
event such petition is filed, no bonds shall be issued hereunder 
unless authorized by a majority of the electors voting on the 
question. 
     Sec. 17.  Minnesota Statutes 1990, section 475.60, 
subdivision 2, is amended to read: 
    Subd. 2.  [REQUIREMENTS WAIVED.] The requirements as to 
public sale shall not apply to: 
    (1) obligations issued under the provisions of a home rule 
charter or of a law specifically authorizing a different method 
of sale, or authorizing them to be issued in such manner or on 
such terms and conditions as the governing body may determine; 
    (2) obligations sold by an issuer in an amount not 
exceeding the total sum of $1,200,000 in any 12-month period; 
    (3) obligations issued by a governing body other than a 
school board in anticipation of the collection of taxes or other 
revenues appropriated for expenditure in a single year, if sold 
in accordance with the most favorable of two or more proposals 
solicited privately; 
    (4) obligations sold to any board, department, or agency of 
the United States of America or of the state of Minnesota, in 
accordance with rules or regulations promulgated by such board, 
department, or agency; 
    (5) obligations issued to fund pension and retirement fund 
liabilities under section 475.52, subdivision 6, obligations 
issued with tender options under section 475.54, subdivision 5a, 
crossover refunding obligations referred to in section 475.67, 
subdivision 13, and any issue of obligations comprised in whole 
or in part of obligations bearing interest at a rate or rates 
which vary periodically referred to in section 475.56; 
    (6) obligations to be issued for a purpose, in a manner, 
and upon terms and conditions authorized by law, if the 
governing body of the municipality, on the advice of bond 
counsel or special tax counsel, determines that interest on the 
obligations cannot be represented to be excluded from gross 
income for purposes of federal income taxation; 
    (7) obligations issued in the form of an installment 
purchase contract, lease purchase agreement, or other similar 
agreement; and 
    (8) obligations sold under a bond reinvestment program; and 
    (9) if the municipality has retained an independent 
financial advisor, obligations which the governing body 
determines shall be sold by private negotiation. 
    Sec. 18.  Minnesota Statutes 1990, 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, or in certificates of deposit secured by letters of 
credit issued by federal home loan banks, 
    (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, (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 a 
general obligations obligation of other another state and or 
local governments government with taxing powers which are is 
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, or (4) a 
general or revenue obligation of any agency or authority of the 
state of Minnesota other than a general obligation of the 
Minnesota housing finance agency, provided that investments 
under clauses (2) and (3) must be in obligations that are rated 
A or better by a national bond rating service and provided that 
investments under clause (4) must be in obligations that are 
rated AA or better by a national bond rating service, 
    (d) in bankers acceptances of United States banks eligible 
for purchase by the Federal Reserve System, 
    (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. 19.  Minnesota Statutes 1990, section 475.67, 
subdivision 3, is amended to read: 
    Subd. 3.  (a) Any or all obligations and interest thereon 
may be refunded if and when and to the extent that for any 
reason the taxes or special assessments, revenues, or other 
funds appropriated for their payment are not sufficient to pay 
all principal and interest due or about to become due thereon.  
    (b) Any or all obligations of one or more issues regardless 
of their source of payment and interest thereon may be refunded 
before their due dates, if:  
    (1) consistent with covenants made with the holders 
thereof, when; and 
    (2) determined by the governing body to be necessary or 
desirable:  
    (i) for the reduction of debt service cost to the 
municipality; or 
    (ii) for the extension or adjustment of the maturities in 
relation to the resources available for their payment,; or 
    (iii) for the issuance of obligations bearing a fixed rate 
of interest in the case of obligations bearing interest at a 
rate varying periodically; or 
    (iv) in the case of obligations payable solely from a 
special fund, for the more advantageous sale of additional 
obligations payable from the same fund or to relieve the 
municipality of restrictions imposed by covenants made with the 
holders of the obligations to be refunded; provided.  
    (c) The amount of interest which may be refunded from the 
proceeds of the refunding obligations shall not exceed the 
amount of proceeds estimated to be required in excess of the 
principal amount of refunded obligations to retire the refunded 
obligations in accordance with subdivision 6, but.  In no event 
shall the aggregate principal amount of the refunding 
obligations exceed by more than ten percent the aggregate 
principal amount of the obligations to be refunded.  
    (d) No general obligations, for which the full faith and 
credit of the issuer is pledged, shall be issued to refund 
special obligations previously issued for any purpose, payable 
solely from a special fund, unless such the issuance is 
authorized by such the election, hearing, petition, resolution, 
or other procedure as that would have been required as a 
condition precedent to the original issuance of general 
obligations for the same purpose. 
    Sec. 20.  [VALIDATION OF INDEPENDENT SCHOOL DISTRICT NO. 
625 BONDS.] 
    Subdivision 1.  [VALIDATION.] The sale of general 
obligation school bonds under the authority of Laws 1990, 
chapter 604, article 8, section 10, by independent school 
district No. 625 pursuant to resolution adopted by two-thirds 
majority vote of all the members of its board of directors on 
April 16, 1991, is validated. 
    Subd. 2.  [EFFECTIVE DATE.] This section is effective the 
day after the governing body of independent school district No. 
625 complies with Minnesota Statutes, section 645.021, 
subdivision 3. 
    Sec. 21.  [ANOKA, WASHINGTON, AND DAKOTA COUNTIES; MORTGAGE 
TAX EXEMPTION.] 
    Subdivision 1.  [AUTHORIZATION.] Construction loans on 
publicly owned low-income or senior multifamily housing projects 
in Anoka, Washington, and Dakota counties shall not be subject 
to the tax imposed by Minnesota Statutes, section 287.04.  If 
the construction loan is held by the same entity as the 
permanent financing on a publicly owned low-income or senior 
multifamily housing, the tax imposed by Minnesota Statutes, 
section 287.04, shall be imposed only once at the time of the 
permanent financing. 
    Subd. 2.  [EFFECTIVE DATE.] This section is effective for 
Washington county upon approval by the Washington county board 
and compliance with Minnesota Statutes, section 645.021, 
subdivision 3.  This section is effective for Dakota county upon 
approval by the Dakota county board and compliance with 
Minnesota Statutes, section 645.021, subdivision 3.  This 
section is effective for Anoka county upon approval by the Anoka 
county board and compliance with Minnesota Statutes, section 
645.021, subdivision 3.  
    Sec. 22.  [REPORT.] 
    The commissioner of administration shall study and report 
to the legislature by January 15, 1992, on ways to make space 
and building decisions impact the operating budgets of the 
agencies that request capital projects, as a way to increase 
efficiency in the management of space.  
    Sec. 23.  [EFFECTIVE DATE.] 
    Sections 7 to 10, and 12 to 19 are effective the day 
following final enactment. 
    Presented to the governor May 31, 1991 
    Signed by the governor June 4, 1991, 8:58 p.m.