Office of the Revisor of Statutes
Minnesota Session Laws - 1991, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1991
CHAPTER 350-H.F.No. 1655
An act relating to taxation; authorizing the
department of finance to issue obligations to finance
construction of aircraft maintenance and repair
facilities; providing tax credits for job creation;
providing an exemption from sales tax for certain
equipment and materials; authorizing establishment of
tax increment financing districts in the cities of
Duluth and Hibbing and on property located at the
Minneapolis-St. Paul International Airport;
authorizing the pledge of city funds by the city of
Duluth to pay debt service on certain obligations;
authorizing the metropolitan airports commission to
issue obligations to finance construction of aircraft
maintenance facilities; authorizing the metropolitan
airports commission to operate outside the
metropolitan area; establishing an interagency task
force; appropriating money; amending Minnesota
Statutes 1990, sections 272.01, subdivision 2; 290.06,
by adding a subdivision; 360.013, subdivision 5;
360.032, subdivision 1; 360.038, subdivision 4;
473.608, subdivision 1; and 473.667, subdivision 8a,
and by adding subdivisions; proposing coding for new
law in Minnesota Statutes, chapters 297A; and 473;
proposing coding for new law as Minnesota Statutes,
chapter 116R.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
AIRCRAFT MAINTENANCE AND ENGINE
REPAIR FACILITIES: STATE FINANCING
Section 1. [116R.01] [DEFINITIONS.]
Subdivision 1. [APPLICATION.] The definitions in this
section apply to sections 1 to 16.
Subd. 2. [BONDS.] "Bonds" means the bonds authorized under
section 2, subdivision 1, or bonds issued to refund these bonds,
except for deficiency bonds.
Subd. 3. [COMMISSIONER.] "Commissioner" means the
commissioner of finance.
Subd. 4. [CORPORATE HEADQUARTERS.] "Corporate
headquarters" means the principal office from which the business
of the corporation is conducted and the principal office of the
chief executive officer of the corporation.
Subd. 5. [DEFICIENCY BONDS.] "Deficiency bonds" means the
bonds authorized under section 13, subdivision 3, or bonds
issued to refund these bonds.
Subd. 6. [PROJECT.] "Project" means the facilities or any
property described in section 5, subdivisions 5 or 6, as
applicable.
Subd. 7. [RELATED PERSON.] "Related person" means any
guarantor of the obligations of the lessee under the lease of a
project and any other person whose relation to the lessee or the
guarantor is that of a related person as defined in section 147
(a)(2) of the Internal Revenue Code of 1986, as amended through
December 31, 1990, and whose financial condition the
commissioner determines to be material for the purposes of
carrying out the due diligence duties under section 2.
Subd. 8. [STATE GUARANTEED BONDS.] "State guaranteed
bonds" means all outstanding bonds secured as provided in
section 2, subdivision 4, paragraph (a).
Subd. 9. [CASH COLLATERAL.] "Cash collateral" means cash
or securities issued or unconditionally guaranteed as to payment
of principal and interest by the United States of America and
maturing or callable at the option of the holder within two
years.
Sec. 2. [116R.02] [BOND ISSUE; SALE AUTHORIZATION.]
Subdivision 1. [SALE AUTHORIZATION.] The commissioner of
finance, upon the request of the governor, may issue and sell
revenue bonds as provided under sections 1 to 16 in one or more
series or issues for the purposes provided in this section in
the aggregate principal amount of up to $350,000,000, except for
refunding bonds. Proceeds of the bonds and investment income on
the proceeds are appropriated in the amounts and for the
purposes specified in subdivisions 2, 5, and 6 and section 4.
Subd. 2. [LOAN, LEASE, AND REVENUE AGREEMENTS.] (a) The
commissioner may loan the proceeds of the bonds, make other
loans or enter into lease agreements or other revenue agreements
for the projects described in subdivisions 5 and 6. The
commissioner may provide for servicing of the loans and
agreements, the times they are payable and the amounts of
payments, the amount of the loans and agreements, their
security, and other terms, conditions, and provisions necessary
or convenient in connection with them and may enter into all
necessary contracts and security instruments in connection with
them. The commissioner shall seek to obtain the best available
terms and security for the loans or agreements. The terms and
security must be reasonably determined by the commissioner to be
adequate and of the kind and degree which would be required by
an investment banking or other financial institution. The
facilities described in subdivisions 5 and 6 must be pledged as
collateral for the loans made and bonds issued under sections 1
to 16.
(b) To reduce the risk that state general funds will be
needed to pay debt service on the state guaranteed bonds, the
commissioner must require that the financing arrangements
include a coverage test satisfactory to the commissioner so that
the sum of the value of the assets and other security pledged to
the payment of bonds or the rent due under any lease of the
project and taken into account by the commissioner is no less
than 125 percent of the difference between the outstanding state
guaranteed bonds, and any cash collateral held in a debt service
reserve account and pledged to the payment of principal and
interest for the state guaranteed bonds and no other bonds.
Assets and other security that may be taken into account include
(1) net unencumbered value of the project and any collateral or
third party guaranty, including a letter of credit, pledged or
otherwise furnished by a user of the project or by a benefited
airline company as security for the payment of rent, (2) bond
proceeds, including earnings thereon, and (3) prepayments of
rent, after making such adjustments the commissioner determines
to be appropriate to take into account any outstanding bonds
secured by a lien on the project or rent that is prior to the
lien securing the state guaranteed bonds, but excluding any cash
collateral deducted from the outstanding state guaranteed bonds
in applying the coverage test. The commissioner may adopt the
method of valuing the assets and other security as the
commissioner determines to be appropriate, including valuation
of the project at its original cost less depreciation.
Subd. 3. [REVIEW PROCEDURE; DATA PRACTICES.] (a) Before
issuing the bonds for a project, approving financial assistance,
or entering into loan, lease, or other revenue agreements for
the project described in subdivisions 5 and 6, the commissioner
of finance shall review the financial condition of the proposed
lessee or lessees of the project or projects, and any related
person. The commissioner shall exercise due diligence in the
review. The commissioner shall engage an independent,
nationally recognized consultant having special expertise with
the airline industry and its financing to prepare a written
report on the financial condition of the lessee or lessees and
any related person. A lessee and any related person shall
provide all information required for the commissioner's review
and the consultant's report, including information substantially
equivalent to that required by an investment bank or other
financial institution considering a project for debt financing.
(b) Except as otherwise provided in this subdivision,
business plans, financial statements, customer lists, and market
and feasibility studies required under sections 1 to 16 or
submitted in connection with the provision of financial
assistance or any agreement authorized under this act are
nonpublic data, as defined in section 13.02, subdivision 9. The
commissioner or the commissioner of trade and economic
development may make the data accessible to any person, agency,
or public entity if the commissioner or the commissioner of
trade and economic development determines that access is
required under state or federal securities law or is necessary
for the person, agency, or public entity to perform due
diligence in connection with the provision of financial
assistance to the projects described in subdivisions 5 and 6.
The data may also be made available as requested by the
legislative commission on planning and fiscal policy.
(c) Before the commissioner issues bonds for a project,
approves financial assistance, or enters into loan, lease, or
other revenue agreements for the project, the commissioner shall
submit a report on the proposed transaction to the governor.
The report must describe: all proposed state, metropolitan, and
local government financial commitments; the financial assistance
proposed to be provided; the proposed loan, lease, and revenue
agreements; any other arrangements related to state and local
debt, taxes, financing, and debt service; and the estimates of
economic activity, air traffic, and other factors that have been
used in assessing the prospective financial condition of the
lessee or lessees and any related person. The report must
contain the following findings:
(1) that the commissioners of trade and economic
development and finance and, for purposes of a project described
in subdivision 5, the metropolitan airports commission have
reviewed the current and prospective financial condition of each
proposed lessee of the project or projects and any related
person; and
(2) that, on the basis of their review, the commissioners
and, for purposes of the project described in subdivision 5, the
commission have determined that the revenues estimated to be
available to the lessee or lessees for payments under the loan,
lease, or other revenue agreements are at least sufficient
during each year of the term of the proposed bonds to pay when
due all financial obligations of the lessee or lessees under the
terms of the proposed loan, lease, or other revenue agreements.
Copies of the report must be filed at the legislature as
provided in section 3.195 when the report is submitted to the
governor.
Subd. 4. [SECURITY.] (a) If so provided in the
commissioner's order or any indenture authorizing the applicable
series of bonds, up to $125,000,000 principal amount of bonds
for the facility described in subdivision 5, up to $50,000,000
principal amount of bonds for the facility described in
subdivision 6, and any bonds issued to refund these bonds may be
secured by either of the following methods:
(1) upon the occurrence of any deficiency in a debt service
reserve fund for a series of bonds as provided in section 13,
subdivision 3, the commissioner shall issue and sell deficiency
bonds in a principal amount not to exceed (i) $125,000,000 for
facilities described in subdivision 5 and (ii) $50,000,000 for
the facilities described in subdivision 6; or
(2) the bonds may be directly secured by a pledge of the
full faith, credit, and taxing power of the state and issued as
general obligation revenue bonds of the state in accordance with
the Minnesota Constitution, article XI, sections 4 to 7. In no
event may the security provided by this paragraph extend in
whole or part to any series of bonds other than the initial
series of bonds so secured and any series of bonds issued to
refund these bonds.
Deficiency bonds and bonds issued under clause (2) must be
issued in accordance with and subject to sections 16A.641,
16A.66, 16A.672, and 16A.675, except for section 16A.641,
subdivision 5, except as otherwise provided in this article, and
except that the bonds may be sold at public or private sale at a
price or prices determined by the commissioner as provided in
section 13, subdivision 3.
(b) The commissioner may request St. Louis county to pay or
secure payment of principal and interest due on up to
$12,600,000 principal amount of revenue bonds for the facility
described in subdivision 5 and principal and interest due on up
to $15,000,000 principal amount of revenue bonds for the
facility described in subdivision 6. At the request of the
commissioner, St. Louis county shall, by resolution of its
county board, unconditionally and irrevocably pledge as a
general obligation, its full faith, credit, and taxing power to
pay or secure payment of principal and interest due on the
principal amount or amounts requested by the commissioner. The
general obligation and pledge of St. Louis county are not
subject to and shall not be taken into account for purposes of
any debt limitation. A levy of taxes for the St. Louis county
general obligation is not subject to and shall not be taken into
account for purposes of any levy limitations. The general
obligation and the bonds secured by the general obligation may
be issued without an election. Except for sections 475.61 and
475.64, chapter 475 does not apply to the general obligation or
to the bonds secured by the general obligation.
(c) The commissioner may request the city of Duluth to pay
or secure payment of principal and interest due on up to
$47,600,000 principal amount of revenue bonds for the facility
described in subdivision 5. At the request of the commissioner,
the city of Duluth shall pledge specified revenues of the city,
as provided in section 24, to pay principal and interest due on
the principal amount requested by the commissioner.
(d) Bonds and deficiency bonds issued under sections 1 to
16 and any indenture entered into in connection with the
issuance of the bonds are not subject to section 16B.06.
Subd. 5. [USE OF PROCEEDS; AIRCRAFT MAINTENANCE FACILITY.]
The proceeds of the bonds issued in a principal amount not to
exceed $250,000,000 may be used to finance the costs related to
the planning, construction, improvement, or equipping of a heavy
maintenance facility for aircraft and facilities subordinate and
related to the facility to be located at the Duluth
international airport and any costs of issuance, reserves,
credit enhancement, or an initial period of interest payments
related to the bonds or the facility. The bond proceeds are
appropriated to the commissioner for the purposes specified in
this subdivision. The facility may be owned by the metropolitan
airports commission and leased for the benefit of one or more
airline companies for use as a heavy maintenance base. With the
approval of the commissioner, the owner of the facility may
place a mortgage or security interest lien on the facility or
any interest in or part of the facility. The mortgage is exempt
from the mortgage registry tax imposed under chapter 287. In
the event of a default under the loan, lease agreement, or other
revenue agreement, the facility, or any part of the facility,
may be leased or sold to another person for any lawful purpose,
subject to the approval of the commissioner. The approval of
the commissioner is not required if the bond trustee has taken
control of the facility as a result of a default.
The ownership of the facility by the owner may create no
liability of the owner for payment of the debt service on the
bonds if so determined by the commissioner. The owner may
require as a condition of entering into the lease of the
facility that the lessee or other party pay all costs, expenses,
or any other obligations of ownership of the facility.
No revenues derived from the lease of the project may be
used other than for a purpose related to the project, including
its operation, administration, maintenance, improvement, or
financing.
Subd. 6. [USE OF PROCEEDS; AIRCRAFT ENGINE REPAIR
FACILITY.] The proceeds of the bonds issued in a principal
amount not to exceed $100,000,000 may be used to finance the
costs related to the planning, construction, improvement, or
equipping of an aircraft engine repair facility and facilities
subordinate and related to the facility to be located at the
Chisholm-Hibbing municipal airport in the city of Hibbing and
any costs of issuance, reserves, credit enhancement, or an
initial period of interest payments related to the bonds or the
facility. The bond proceeds are appropriated to the
commissioner for the purposes specified in this subdivision.
The facility may be owned by the owner of the Chisholm-Hibbing
municipal airport, but may be leased, with or without a purchase
option, to any person for the primary purpose of repairing
aircraft engines or components. With the approval of the
commissioner, the owner of the facility may place a mortgage or
security interest lien on the facility. The mortgage is exempt
from the mortgage registry tax imposed under chapter 287. In
the event of a default under the loan, lease agreement, or other
revenue agreement, the facility may be leased or sold to another
person for any lawful purpose, subject to the approval of the
commissioner. The approval of the commissioner is not required
if the bond trustee has taken control of the facility as a
result of a default.
Subd. 7. [AGREEMENT OF LESSEE.] (a) Before issuing the
bonds for the facilities, approving financial assistance, or
entering into loan, lease, or other revenue agreements for the
projects described in subdivisions 5 and 6, the commissioner
shall determine that the lessee and, if necessary, other
corporations affiliated with by common ownership with the lessee
have agreed to requirements satisfactory to the commissioner
respecting aircraft noise abatement.
(b) The leases for each of the facilities described in
subdivisions 5 and 6 must contain covenants and agreements by
the airline corporation and any successor in interest providing
for the retention and location of existing employees,
operations, and facilities, including headquarters, of the
airline corporation in the state until the principal and
interest on the last series of deficiency bonds and general
obligation revenue bonds issued under subdivision 4, paragraph
(a), clause (2), are paid.
Subd. 8. [ENVIRONMENTAL ASSESSMENT.] Notwithstanding any
other law or rule, no environmental review must be completed
prior to the approval of an application and the issuance of a
conditional commitment for the loan, or the taking of any other
action permitted by article 1, including the issuance of bonds,
unless considered necessary or desirable by the commissioner to
prepare for a final commitment and to make it effective.
Environmental review, to the extent required by law, shall be
made in conjunction with the issuance by state agencies of
environmental permits for the project. Permits may be applied
for prior to the issuance of a conditional commitment. Action
shall be taken as expeditiously as possible on environmental
review and all permits required.
Subd. 9. [PROJECT COST REPORT.] Before the commissioner of
finance issues bonds, approves financial assistance, or enters
into loan, lease, or other revenue agreements for the projects
described in subdivisions 5 and 6, the commissioner of trade and
economic development shall report to the governor on total
public costs related to the construction of the projects. The
report must include: an estimate of the total state,
metropolitan, and local tax costs for the project; and an
estimate of the total state, metropolitan, and local capital
costs, and method of financing, of any airport and off-airport
improvements related to the construction of the facilities but
not included in the cost of the facilities, including any runway
or taxiway improvements and road, highway, sewer, or other
public facility or utility improvement costs. Copies of the
report must be filed at the legislature as provided in section
3.195 when the report is submitted to the governor.
Sec. 3. [116R.03] [GENERAL POWERS.]
For the purpose of exercising the specific powers
authorized under sections 1 to 16 and effectuating the other
purposes of sections 1 to 16, the commissioner may:
(1) acquire, hold, pledge, assign, or dispose of real or
personal property or any interest in property, including a
mortgage or security interest in a facility described in section
2, subdivision 5 or 6;
(2) enter into agreements, contracts, or other transactions
with any federal or state agency, any person and any domestic or
foreign partnership, corporation, association, or organization,
including contracts or agreements for administration and
implementation of all or part of sections 1 to 16;
(3) acquire real property, or an interest therein, by
purchase or foreclosure, where the acquisition is necessary or
appropriate;
(4) enter into agreements with lenders, borrowers, or the
issuers of securities for the purpose of regulating the
development and management of any facility financed in whole or
in part by the proceeds of bonds or loans;
(5) enter into agreements with other appropriate federal,
state, or local governmental units; and
(6) contract with, use, or employ any federal, state,
regional, or local public or private agency or organization,
legal counsel, financial advisors, investment bankers or others,
upon terms the commissioner considers necessary or desirable, to
assist in the exercise of any of the powers authorized under
sections 1 to 16 and to carry out the objectives of sections 1
to 16 and may pay for the services from bond proceeds or
otherwise available department money.
Sec. 4. [116R.04] [REVENUE BONDS; PURPOSES, TERMS,
APPROVAL.]
Subdivision 1. [BONDS.] The commissioner from time to time
may issue negotiable bonds in one or more series or issues in a
principal amount which, in the opinion of the commissioner of
trade and economic development, is necessary to provide
sufficient funds for achieving the purposes of sections 1 to 16,
which may include the construction of a heavy maintenance
facility for aircraft to be located at the Duluth international
airport, the financing of an aircraft engine repair facility in
the city of Hibbing, the payment of interest on bonds of the
commissioner, the establishment of reserves to secure the bonds,
and the payment of all other expenditures of the commissioner
and the owner of a financed facility incident to and necessary
or convenient to carry out the purposes and powers of sections 1
to 16. The bonds may be issued as bonds or notes or in any
other form authorized by law. Except as provided in section 2,
subdivision 4, paragraph (a), section 4, subdivision 3, or an
order of the commissioner or indenture authorizing the bonds,
sections 16A.631 to 16A.675 do not apply to the bonds authorized
under section 2.
Subd. 2. [REFUNDING OF BONDS.] The commissioner from time
to time may issue bonds for the purpose of refunding any bonds
then outstanding, including the payment of any redemption
premiums thereon, any interest accrued or to accrue to the
redemption date, and costs related to the issuance and sale of
the bonds. The proceeds of any refunding bonds may, in the
discretion of the commissioner, be applied to the purchase or
payment at maturity of the bonds to be refunded, to the
redemption of such outstanding bonds on any redemption date, or
to pay interest on the refunding bonds and may, pending such
application, be placed in escrow to be applied to such purchase,
payment, retirement, or redemption. Any such escrowed proceeds,
pending such use, may be invested and reinvested in obligations
that are authorized investments under section 11A.24. The
income earned or realized on any such investment may also be
applied to the payment of the bonds to be refunded, interest or
premiums on the refunded bonds, or to pay interest on the
refunding bonds. After the terms of the escrow have been fully
satisfied, any balance of such proceeds and any investment
income may be returned to the general fund or, if applicable,
the state bond fund, for use in any lawful manner. All
refunding bonds issued under the provisions of this subdivision
must be issued and secured in the manner provided by order of
the commissioner, provided that any refunding bonds may be
secured in any manner by which the refunded bonds were secured
and payable from any source from which the refunded bonds were
payable.
Subd. 3. [KIND OF BONDS.] All bonds issued under this
section must be issued in the form and manner and information in
a bond register is subject to the limitations provided in
section 16A.672.
Subd. 4. [COMPLIANCE WITH FEDERAL LAW.] The commissioner
may covenant and agree with the holders of the bonds that the
state will comply, insofar as possible, with the provisions of
the United States Internal Revenue Code now or hereafter enacted
that are applicable to the bonds and that establish conditions
under which the interest to be paid on the bonds will not be
includable in gross income for federal tax purposes.
Subd. 5. [TAXABILITY OF INTEREST.] The bonds may be issued
without regard to whether the interest to be paid on them is
includable in gross income for federal tax purposes.
Sec. 5. [116R.05] [BONDS; ORDERS AUTHORIZING, ADDITIONAL
TERMS, SALE.]
Subdivision 1. [TERMS.] The bonds must be authorized by an
order or orders of the commissioner, bear such date or dates,
mature at such time or times, bear interest at such rate or
rates, be in such denominations, be in such form, carry such
registration privileges, be executed in such manner, be payable
in lawful money of the United States, at such place or places
within or without the state, and be subject to such terms of
redemption or purchase prior to maturity as the order or orders
may provide, or as may be provided in any indenture or
indentures of trust. If, for any reason, whether existing at
the date of issue of any bonds or at the date of making or
purchasing any loan or securities from the proceeds or after
that date, the interest on any bonds is or becomes subject to
federal income taxation, this shall not impair or affect the
validity of the provisions made for the security of the bonds.
The bonds may be sold at public or private sale at a price or
prices determined by the commissioner. The underwriting
discount, spread, or commission paid or allowed to the
underwriters of the bonds, however, must be an amount not in
excess of the amount determined by the commissioner to be
reasonable in the light of the risk assumed and the expenses of
issuance, if any, required to be paid by the underwriters or
prevailing market conditions and practices.
Subd. 2. [SOURCES OF PAYMENT.] Except as otherwise
provided for bonds issued under section 2, subdivision 4,
paragraph (a), the bonds and interest payable thereon are
payable solely from the following sources and are irrevocably
appropriated for that purpose, but only to the extent provided
in the order or indenture authorizing or securing the bonds:
(1) revenues of any nature derived from the ownership,
lease, operation, sale, foreclosure, or refinancing of a project
described in section 2, subdivision 5 or 6;
(2) repayments of any loans made under sections 1 to 16;
(3) proceeds of any bonds or deficiency bonds;
(4) amounts in any account or accounts authorized by
section 11 or 12;
(5) amounts paid by St. Louis county under its obligations
referred to in section 2, subdivision 4, and amounts paid under
section 24 or 25 for the payment of bonds or interest thereon;
(6) amounts payable under any insurance policy, guaranty,
letter of credit, or other instrument securing the bonds;
(7) any other revenues which the commissioner may pledge
but excluding state appropriations unless the appropriation was
specifically designated for that purpose; and
(8) investment income on any of the sources specified in
clauses (1) to (7).
Subd. 3. [NOT A STATE DEBT.] Except as provided in section
2, subdivision 4, paragraph (a), no bond shall constitute a debt
of the state within the meaning of any statutory or
constitutional limitation or pledge the full faith and credit of
the state and no holder of any bonds may compel any exercise of
the taxing power of the state to pay principal, premiums, or
interest for the bonds, nor to enforce payment of principal,
premiums, or interest against any property of the state, except
for property expressly pledged, mortgaged, encumbered, or
appropriated for this purpose.
Sec. 6. [116R.06] [BONDS; OPTIONAL ORDER AND CONTRACT
PROVISIONS.]
Any order authorizing any bonds or any issue of bonds or
any indenture may contain provisions, which may be a part of the
contract with the holders of the bonds, as to the matters
referred to in this section.
(a) It may pledge or create a lien on money or property and
any money held in trust or otherwise by others to secure the
payment of the bonds or of any series or issue of bonds and
interest thereon and of any sums due to the trustee under the
indenture, and may grant different priorities in the lien for
different series of bonds, subject to any agreements with
bondholders which exist.
(b) It may provide for the custody, collection, securing,
investment, and payment of money.
(c) It may set aside reserves or sinking funds and provide
for their regulation and disposition and may create other
special funds into which money may be deposited.
(d) It may limit the loans and securities to which the
proceeds of sale of bonds may be applied and may pledge
repayments thereon to secure the payment of the bonds or of any
series or issue of bonds.
(e) It may limit the issuance of additional bonds, the
terms upon which additional bonds may be issued and secured, and
the refunding of outstanding or other bonds.
(f) It may prescribe the procedure, if any, by which the
terms of any contract with bondholders may be amended or
abrogated, the amount of bonds the holders of which must consent
to the amendment or abrogation, and the manner in which that
consent may be given.
(g) It may vest in a trustee or trustees property, rights,
powers, and duties in trust determined by the commissioner,
which may include any or all of the rights, powers, and duties
of the bondholders, or may limit the rights, powers, and duties
of the trustee. It may make contracts with a trustee or
trustees authorizing the trustee or trustees to invest in
investments that may be invested in by the state board of
investment under section 11A.24, and apply, or dispose of and
use money in any account.
(h) It may define the acts or omissions to act which
constitute a default in the obligations and duties of the
commissioner and may provide for the rights and remedies of the
holders of bonds in the event of a default, and provide any
other matters of like or different character, consistent with
the general laws of the state and other provisions of sections 1
to 16, which in any way affect the security or protection of the
bonds and the rights of the bondholders.
(i) It may incur obligations under the indenture or under
any paying agency, bond registrar agreement or escrow agreement
to pay the compensation and expenses of the trustee, paying
agent, bond registrar or escrow agent for the bonds and to pay
any sums required to be rebated to the United States to comply
with applicable tax laws; and a sum sufficient to satisfy these
obligations is annually appropriated to the commissioner from
the general fund to the extent other revenues available for that
purpose are insufficient.
Sec. 7. [116R.07] [PLEDGES.]
Any pledge made by the commissioner is valid and binding
from the time the pledge is made. The money or property pledged
and later received by the commissioner is immediately subject to
the lien of the pledge without any physical delivery of the
property or money or further act, and the lien of any pledge is
valid and binding as against all parties having claims of any
kind in tort, contract, or otherwise against the commissioner,
whether or not those parties have notice of the lien or pledge.
Neither the order nor any other instrument by which a pledge is
created need be recorded.
Sec. 8. [116R.08] [BONDS; NONLIABILITY OF INDIVIDUALS.]
The commissioner and the commissioner's staff and any
person executing the bonds are not personally liable on the
bonds or subject to any personal liability or accountability by
reason of their issuance.
Sec. 9. [116R.09] [BONDS; PURCHASE AND CANCELLATION.]
The commissioner, subject to agreements with bondholders
which may then exist, has power out of any funds available for
the purpose to purchase bonds of the commissioner at a price not
exceeding (a) if the bonds are then redeemable, the redemption
price then applicable plus accrued interest to the next interest
payment date thereon, or (b) if the bonds are not redeemable,
the redemption price applicable on the first date after the
purchase upon which the bonds become subject to redemption plus
accrued interest to that date.
Sec. 10. [116R.10] [STATE PLEDGE AGAINST IMPAIRMENT OF
CONTRACTS.]
The state pledges and agrees with the holders of any bonds
that the state will not limit or alter the rights vested in the
commissioner to fulfill the terms of any agreements made with
the bondholders, or in any way impair the rights and remedies of
the holders until the bonds, together with interest on them,
with interest on any unpaid installments of interest, and all
costs and expenses in connection with any action or proceeding
by or on behalf of the bondholders, are fully met and
discharged. The commissioner may include this pledge and
agreement of the state in any agreement with the holders of
bonds issued under sections 1 to 16.
Sec. 11. [116R.11] [AIRCRAFT FACILITIES FUNDS AND DEBT
SERVICE ACCOUNTS.]
Subdivision 1. [FUNDS.] The commissioner or any trustee
appointed by the commissioner under sections 1 to 16 shall
establish and maintain an aircraft facilities fund for each of
the projects described in section 2, subdivisions 5 and 6.
Except for amounts required by the commissioner to be deposited
in a debt service account, proceeds of each issue of bonds
authorized under section 2, subdivision 1, must be deposited in
a separate account, debt service reserve, or other account
designated by the commissioner. Money in the account is
appropriated to the commissioner. The commissioner or the owner
of each project described in section 2, subdivisions 5 and 6,
may withdraw proceeds of bonds for application to the
appropriated purposes in the manner provided by order of the
commissioner or in any indenture authorized by order of the
commissioner. The commissioner may establish whatever accounts
might be necessary to carry out sections 1 to 16. All deposits
into and disbursements from accounts for the purposes and from
the sources of revenue authorized by sections 1 to 16 and
provided in an order of the commissioner or an indenture or
other agreement authorized by the commissioner are appropriated
for that purpose.
Subd. 2. [ACCOUNTS.] The state treasurer or any trustee
appointed by the commissioner under sections 1 to 16 shall
maintain permanently on official books and records debt service
accounts separate from all other funds and accounts, to record
all receipts and disbursements of money for principal and
interest payments on each series of bonds. No later than the
due date of each principal and interest payment on the bonds,
the commissioner shall withdraw from the proceeds of the bonds,
or from revenues on hand and available for the purpose, and
shall deposit in the debt service accounts the amount, if any,
required to be deposited in the account by the order of the
commissioner or any indenture authorized by an order of the
commissioner. All amounts in any debt service account are
appropriated for the payment of principal, premiums, and
interest for the bonds to which the account relates. If the
Minnesota Constitution, article XI, section 7, applies to any
series of bonds, amounts in the debt service account and any
debt service reserve account established under section 13 for
the bonds, regardless of who holds or invests the amounts, must
be special accounts of the state bond fund, for which the state
treasurer shall maintain records. Amounts in the accounts must
reduce any levy otherwise required by the Minnesota Constitution
for payment of principal or interest on the bonds.
Sec. 12. [116R.12] [POWERS AND DUTIES OF TRUSTEE.]
Subdivision 1. [GENERAL.] The trustee, if any, designated
in any indenture or order securing an issue of bonds may, in the
trustee's own name, if so provided in the indenture or order:
(1) enforce all rights of the bondholders, including the
right to require the commissioner to collect fees, charges,
interest, and payments on leases, loans, or interests therein
held by the commissioner and eligible securities purchased by it
adequate to carry out any agreement as to, or pledge of, those
fees, charges, and payments, and to require the commissioner to
carry out any other agreements with the holders of the bonds and
to perform the duties required under sections 1 to 16;
(2) bring suit upon the bonds;
(3) require the commissioner to account as if it were the
trustee of any express trust for the holders of the bonds;
(4) enjoin any acts or things which may be unlawful or in
violation of the rights of holders of the bonds; or
(5) upon a default as defined in any bond, order, or
indenture, declare all the bonds due and payable, enforce any
remedy available under law, and if all defaults are made good,
the trustee may annul the declaration and consequences.
Subd. 2. [ADDITIONAL POWERS.] In addition to the powers in
subdivision 1, the trustee has all of the powers necessary or
appropriate for the exercise of any functions specifically set
forth in this section or incident to the general representation
of bondholders in the enforcement and protection of their rights.
Subd. 3. [VENUE.] The venue of any action or proceedings
brought by a trustee is in Ramsey county.
Sec. 13. [116R.13] [DEBT SERVICE RESERVE ACCOUNT.]
Subdivision 1. [AUTHORITY.] The commissioner or a trustee
appointed by the commissioner may create, maintain, and
establish a special account or accounts for the security of one
or more or all series of the bonds, which accounts are known as
debt service reserve accounts. The commissioner may pay into
each debt service reserve account:
(1) any money appropriated by the state only for the
purposes of that account;
(2) any proceeds of sale of bonds to the extent provided in
the order or indenture authorizing their issuance;
(3) any money directed to be transferred by the
commissioner to that debt service reserve account; and
(4) any other money made available to the commissioner for
the purpose of that account from any other source.
Subd. 2. [USE OF MONEY.] The money held in or credited to
each debt service reserve account, except as provided in this
section, must be used solely for the payment of the principal of
bonds of the commissioner as the bonds mature or otherwise
become due, the purchase of the bonds, the payment of interest
on the bonds, the payment of any premium required when the bonds
are redeemed before maturity, the payment of trustee or paying
agency or registrar fees and expenses, the reimbursement of any
advance made from another fund or account, or the payment of any
rebate amounts owing to the United States government in
accordance with any applicable covenant to comply with federal
tax laws; provided, that money in a debt service reserve account
may not be withdrawn at any time in an amount which would reduce
the amount of the account to less than any amount which the
commissioner determines to be reasonably necessary for the
purposes of the account, except for the purpose of paying
principal, premium, or interest due on bonds secured by the
account, for the payment of which other money is not available.
Subd. 3. [GENERAL OBLIGATION BONDS.] (a) If the amount in
any debt service reserve account falls below the minimum
required in an order of the commissioner or indenture for the
applicable series of bonds and the order or indenture so
provides and subject to the limitations in section 2,
subdivision 4, paragraph (a), clause (1), the commissioner shall
issue as promptly as practicable, but in no event later than six
months after the occurrence of the deficiency, general
obligation bonds in accordance with the Minnesota Constitution,
article XI, section 7, and section 2, subdivision 4; section
16A.641, subdivisions 1 to 4 and 6 to 13; section 16A.66,
section 16A.672; and section 16A.675, except as otherwise
provided in this section and unless provision is made for
restoring the deficiency from other sources. Section 16A.641,
subdivision 5, does not apply to the issuance of bonds
authorized under this subdivision. Amounts sufficient to pay
the costs of issuance of the deficiency bonds are appropriated
to the commissioner from the general fund to the extent other
available money is insufficient. Proceeds of the deficiency
bonds may be used to pay costs related to the issuance of the
deficiency bonds and interest due on the deficiency bonds and to
establish a debt service reserve for the deficiency bonds. Any
remaining proceeds must be deposited in the debt service reserve
account, except that accrued interest must be deposited as
provided in section 16A.641, subdivision 7, paragraph (b). The
proceeds of the deficiency bonds and any investment income are
appropriated for these purposes. In any event, the proceeds of
the deficiency bonds deposited in the debt service reserve
account must be an amount not less than the commissioner
determines is required to pay principal and interest on the
state guaranteed bonds secured by the debt service reserve
account.
(b) The underwriting discount, spread, or commission paid
or allowed to the underwriters or placement agents of deficiency
bonds and bonds described in section 2, subdivision 4, paragraph
(a), must be an amount not in excess of the amount determined by
the commissioner to be reasonable in light of the risk assumed
and the expense of issuance, if any, required to be paid by the
underwriters, placement agents, or prevailing market conditions
and practices.
Subd. 4. [LIMITATION.] If the commissioner creates a debt
service reserve account for the security of any series of bonds,
the commissioner may not issue any additional bonds which are
similarly secured if the amount of any of the debt service
reserve accounts at the time of issuance does not equal or
exceed the minimum amount, if any, required by the resolution
creating that account, unless the commissioner deposits in each
account at the time of issuance, from the proceeds of the bonds
or otherwise, an amount which, together with the amount then in
the account, will not be less than the minimum amount required.
Subd. 5. [EXCESS MONEY.] To the extent consistent with the
orders and indentures securing outstanding bonds, the
commissioner may, at the close of any fiscal year, transfer to
any other account from any debt service reserve account, any
excess in that account over the amount considered by the
commissioner to be reasonably necessary for the purpose of the
account.
Subd. 6. [CONSTRUCTION.] Nothing in this section may be
construed to limit the right of the commissioner to create and
establish by order or indenture other accounts or security in
addition to debt service reserve accounts which are necessary or
desirable in connection with any bonds.
Sec. 14. [116R.14] [CONSTRUCTION.]
Sections 1 to 16 are necessary for the welfare of the state
of Minnesota and its inhabitants; therefore, they shall be
liberally construed to effect their purpose.
Sec. 15. [116R.15] [SEVERABILITY; ACTIONS.]
Each of the provisions of sections 1 to 16, and each
application thereof to particular circumstances, is severable.
If any provision or application is found to be unconstitutional
and void, it is the intention that the remaining provisions and
applications shall be valid and enforceable to the full extent
possible under section 645.20.
Sec. 16. [116R.16] [CORPORATE HEADQUARTERS.]
A lease agreement may be entered under sections 1 to 15
only if the affected parties provide an enforceable pledge that
their corporate headquarters will remain in Minnesota for the
duration of the agreement.
Sec. 17. Minnesota Statutes 1990, section 272.01,
subdivision 2, is amended to read:
Subd. 2. (a) When any real or personal property which is
exempt from ad valorem taxes, and taxes in lieu thereof, is
leased, loaned, or otherwise made available and used by a
private individual, association, or corporation in connection
with a business conducted for profit, there shall be imposed a
tax, for the privilege of so using or possessing such real or
personal property, in the same amount and to the same extent as
though the lessee or user was the owner of such property.
(b) The tax imposed by this subdivision shall not apply to:
(1) property leased or used as a concession in or relative
to the use in whole or part of a public park, market,
fairgrounds, port authority, economic development authority
established under chapter 458C, municipal auditorium, municipal
parking facility, municipal museum, or municipal stadium;
(2) property of an airport owned by a city, town, county,
or group thereof which is:
(i) leased to or used by any person or entity including a
fixed base operator; and
(ii) used as a hangar for the storage or repair of aircraft
or to provide aviation goods, services, or facilities to the
airport or general public;
the exception from taxation provided in this clause does not
apply to:
(i) property located at an airport owned or operated by the
metropolitan airports commission or by a city of over 50,000
population according to the most recent federal census or such a
city's airport authority; or
(ii) hangars leased by a private individual, association,
or corporation in connection with a business conducted for
profit other than an aviation-related business; or
(iii) facilities leased by a private individual,
association or corporation in connection with a business for
profit, that consists of a major jet engine repair facility
financed, in whole or part, with the proceeds of state bonds and
located in a tax increment financing district;
(3) property constituting or used as a public pedestrian
ramp or concourse in connection with a public airport; or
(4) property constituting or used as a passenger check-in
area or ticket sale counter, boarding area, or luggage claim
area in connection with a public airport but not the airports
owned or operated by the metropolitan airports commission or
cities of over 50,000 population or an airport authority
therein. Real estate owned by a municipality in connection with
the operation of a public airport and leased or used for
agricultural purposes is not exempt.
(c) Taxes imposed by this subdivision are payable as in the
case of personal property taxes and shall be assessed to the
lessees or users of real or personal property in the same manner
as taxes assessed to owners of real or personal property, except
that such taxes shall not become a lien against the property.
When due, the taxes shall constitute a debt due from the lessee
or user to the state, township, city, county, and school
district for which the taxes were assessed and shall be
collected in the same manner as personal property taxes. If
property subject to the tax imposed by this subdivision is
leased or used jointly by two or more persons, each lessee or
user shall be jointly and severally liable for payment of the
tax.
(d) The tax on real property of the state or any of its
political subdivisions that is leased by a private individual,
association, or corporation and becomes taxable under this
subdivision or other provision of law must be assessed and
collected as a personal property assessment. The taxes do not
become a lien against the real property.
Sec. 18. Minnesota Statutes 1990, section 290.06, is
amended by adding a subdivision to read:
Subd. 24. [CREDIT FOR JOB CREATION.] (a) A corporation
that leases and operates a heavy maintenance base for aircraft
that is owned by the state of Minnesota or one of its political
subdivisions, or an engine repair facility described in section
2, subdivision 6, or both, may take a credit against the tax due
under this chapter.
(b) For the first taxable year when the facility has been
in operation for at least three consecutive months, the credit
is equal to $5,000 multiplied by the number of persons employed
by the corporation on a full-time basis at the facility on the
last day of the taxable year, not to exceed the number of
persons employed by the corporation on a full-time basis at the
facility on the date 90 days before the last day of the taxable
year. For each of the succeeding four taxable years, the credit
is equal to $5,000 multiplied by the number of persons employed
by the corporation on a full-time basis at the facility on the
last day of the taxable year, not to exceed the number of
persons employed by the corporation on a full-time basis at the
facility on the date 90 days before the last day of the taxable
year.
(c) For the first taxable year in which the credit is
allowed for the facility, the credit must not exceed 80 percent
of the wages paid to or incurred for persons employed by the
taxpayer at the facility during the taxable year. For the
succeeding four taxable years, the credit must not exceed 20
percent of the wages paid to or incurred for persons employed by
the taxpayer at the facility during the taxable year. For
purposes of this section, "wages" has the meaning given under
section 3121(b) of the Internal Revenue Code of 1986, as amended
through December 31, 1990, except the limitation to the
contribution and benefit base does not apply.
(d) If the credit provided under this subdivision exceeds
the tax liability of the corporation for the taxable year, the
excess amount of the credit may be carried over to each of the
ten taxable years succeeding the taxable year. The entire
amount of the credit must be carried to the earliest taxable
year to which the amount may be carried. The unused portion of
the credit must be carried to the following taxable year. No
credit may be carried to a taxable year more than ten years
after the taxable year in which the credit was earned.
Sec. 19. [297A.2571] [AIRCRAFT FACILITY MATERIALS;
EXEMPTIONS.]
Materials, equipment, and supplies used or consumed in
constructing, or incorporated into the construction of, a heavy
maintenance facility for aircraft that is to be owned by the
state of Minnesota or one of its political subdivisions and
leased by an airline company, or an aircraft engine repair
facility described in section 2, subdivision 6, are exempt from
the taxes imposed under this chapter and from any sales and use
tax imposed by a local unit of government, notwithstanding any
ordinance or city charter provision. Except for equipment owned
or leased by a contractor, all machinery, equipment, and tools
necessary to the construction and equipping of that facility in
order to provide those services is also exempt.
Sec. 20. Minnesota Statutes 1990, section 360.013,
subdivision 5, is amended to read:
Subd. 5. "Airport" means any area, of land or water,
except a restricted landing area, which is designed for the
landing and takeoff of aircraft, whether or not facilities are
provided for the shelter, surfacing, or repair of aircraft, or
for receiving or discharging passengers or cargo, and all
appurtenant areas used or suitable for airport buildings or
other airport facilities, including facilities described in
section 2, subdivision 6, and all appurtenant rights of way,
whether heretofore or hereafter established.
Sec. 21. Minnesota Statutes 1990, section 360.032,
subdivision 1, is amended to read:
Subdivision 1. [ACQUISITION.] Every municipality is hereby
authorized, through its governing body, to acquire property,
real or personal, for the purpose of establishing, constructing,
and enlarging airports and other air navigation facilities and
to acquire, establish, construct, enlarge, improve, maintain,
equip, operate, and regulate such airports and other air
navigation facilities and structures and other property
incidental to their operation, either within or without the
territorial limits of such municipality and within or without
this state; to make, prior to any such acquisition,
investigations, surveys, and plans; to construct, install, and
maintain airport facilities for the servicing and repair of
aircraft and facilities authorized under section 2, subdivision
6, and for the comfort and accommodation of air travelers; and
to purchase and sell equipment and supplies as an incident to
the operation of its airport properties. It may not acquire, or
take over any airport or other air navigation facility owned or
controlled by any other municipality of the state without the
consent of such municipality. It may use for airport purposes
any available property that is now or may at any time hereafter
be owned or controlled by it. Such air navigation facilities as
are established on airports shall be supplementary to and
coordinated in design and operation with those established and
operated by the federal and state governments. It may assist
other municipalities in the construction of approach roads
leading to any airport or restricted landing area owned or
controlled by it. In financing the facilities authorized under
section 2, subdivision 6, it may borrow from the state or
otherwise arrange for financing of the facilities and for that
purpose may exercise any powers vested in a municipality under
sections 469.152 to 469.165.
Sec. 22. Minnesota Statutes 1990, section 360.038,
subdivision 4, is amended to read:
Subd. 4. [LEASED PROPERTY.] To lease for a term not
exceeding 30 years such airports or, other air navigation
facilities or facilities authorized under section 2, subdivision
6, or real property acquired or set apart for airport purposes,
to private parties, any municipal or state government or the
national government, or any department of either thereof, for
operation; to lease or assign for a term not exceeding 99 years
to private parties, any municipal or state government, or the
national government, or any department of either thereof, for
operation or use consistent with the purposes of sections
360.011 to 360.076, space, area, improvements, or equipment on
such airports; notwithstanding any other provisions in this
subdivision, to lease ground area for a term not exceeding 99
years to private persons for the construction of structures
which in its opinion are essential and necessary to serve
aircraft, persons and things engaged in or incidental to
aeronautics, including but not limited to shops, hangars,
offices, restaurants, hotels, motels, factories, storage space,
and any and all other structures necessary or essential to and
consistent with the purposes of sections 360.011 to 360.076, to
sell any part of such airports, other air navigation facilities,
or real property to any municipal or state government, or to the
United States or any department or instrumentality thereof, for
aeronautical purposes incidental thereto, and to confer the
privileges of concessions of supplying upon its airports goods,
commodities, things, services, and facilities; provided that in
each case in so doing the public is not deprived of its
rightful, equal, and uniform use thereof.
Sec. 23. Minnesota Statutes 1990, section 473.608,
subdivision 1, is amended to read:
Subdivision 1. The corporation, subject to the conditions
and limitations prescribed by law, shall possess all the powers
as a body corporate necessary and convenient to accomplish the
objects and perform the duties prescribed by sections 473.601 to
473.679, including but not limited to those hereinafter
specified. These powers, except as limited by section 473.622,
may be exercised at any place within 35 miles of the city hall
of either Minneapolis or St. Paul, and in the metropolitan area,
and in the city of Duluth for the purpose of owning, leasing,
constructing, equipping, operating, borrowing money from the
state for, or otherwise arranging for financing the facility
described in section 2, subdivision 5.
A state loan to finance the facility described in section
2, subdivision 5, must be made on terms and conditions as the
commissioner of finance, the commissioner of trade and economic
development, and the commission determine to be appropriate.
The state loan is not subject to and may not be counted against
any limitation on the principal amount of revenue bonds or
general obligation revenue bonds that the commission may issue
under sections 473.601 to 473.679.
Sec. 24. [CITY OF DULUTH; TAX INCREMENT FINANCING DISTRICT
WITH CITY FUNDS PLEDGE.]
Subdivision 1. [AUTHORIZATION.] The city of Duluth may
create a tax increment financing district, as provided in this
subdivision, on property located at the Duluth international
airport. Except as provided otherwise in this section, the
provisions of Minnesota Statutes, sections 469.174 to 469.179,
shall apply to the district. The district shall consist of
parcels on which the facility described in section 2,
subdivision 5, is proposed to be located. The city or any of
its authorities or agencies listed in Minnesota Statutes,
section 469.174, subdivision 2, may be the "authority" for
purposes of Minnesota Statutes, sections 469.174 to 469.179.
The governing body of the city of Duluth may irrevocably
pledge to the payment or security for the payment of principal
and interest on bonds issued for the project described in
section 2, subdivision 5, any money payable to or held in any of
the funds specified in section 54(a) of the Duluth city charter.
The authority or agency being utilized for this tax
increment financing district shall be expanded by two members.
The additional two members shall be elected county commissioners
from the city of Duluth and appointed by the St. Louis county
board for terms as designated by the county board.
Subd. 2. [CHARACTERISTICS OF THE DISTRICT.] (a) The
district shall be a redevelopment district as defined in
Minnesota Statutes, section 469.174, subdivision 10, except that
the durational limit under Minnesota Statutes, section 469.176,
subdivision 1, paragraph (e), shall be extended to 30 years.
(b) Notwithstanding Minnesota Statutes, section 469.176,
subdivision 4j, the revenue derived from tax increments from
this district and money in any of the funds specified in section
54(a) of the Duluth City Charter that are pledged by the
governing body of the city of Duluth for this purpose must be
used to pay debt service on the obligations or debt issued under
section 4 to finance any portion of the facilities described in
section 2, subdivision 5, in a principal amount not to exceed
$47,600,000. If the revenues derived from tax increment and the
maximum amount of the other pledged revenues exceed the minimum
amount the bond indenture requires to be deposited in the debt
service fund, including any reserve, the excess either must be
used (1) to defease the bonds, or (2) to reduce pro rata the
amount of other pledged revenues and tax increments required to
be deposited in the debt service fund. Tax increments not
required to be deposited in the debt service fund are excess tax
increments and must be distributed as provided in section
469.176, subdivision 2, paragraph (a), clause (4).
(c) Administrative expenses of the district may be paid out
of the proceeds of the bonds as the commissioner of finance
determines appropriate and are appropriated for that purpose.
(d) The provisions of Minnesota Statutes, section 273.1399,
do not apply to the district.
Sec. 25. [CITY OF HIBBING; TAX INCREMENT FINANCING
DISTRICT.]
Subdivision 1. [AUTHORIZATION.] (a) The city of Hibbing
may create a tax increment financing district, as provided in
this subdivision, on property located in the city of Hibbing.
Except as provided otherwise in this section, the provisions of
Minnesota Statutes, sections 469.174 to 469.179, shall apply to
the district. With the consent of St. Louis county, the
district shall consist of parcels on which the facility
described in section 2, subdivision 6, is proposed to be located
and any other adjoining areas into which expansion of the
facility or development caused by the facility may be expected
to occur. The city or any of its authorities or agencies listed
in Minnesota Statutes, section 469.174, subdivision 2, may be
the "authority" for purposes of Minnesota Statutes, sections
469.174 to 469.179.
(b) By resolution of the governing bodies of St. Louis
county and the city of Chisholm and without an election, either
or both St. Louis county and the city of Chisholm may treat an
obligation, or any portion thereof, of the city of Hibbing
issued under Minnesota Statutes, section 469.178, subdivision 2,
as a general obligation of St. Louis county or the city of
Chisholm, by unconditionally and irrevocably pledging their full
faith and credit and taxing power. Except for Minnesota
Statutes, sections 475.61 and 475.64, the pledge is not subject
to Minnesota Statutes, chapter 475. The obligations, the pledge
of St. Louis county, and the pledge of the city of Chisholm are
not subject to and shall not be taken into account for purposes
of any debt limitation. A levy of taxes for the obligations is
not subject to and shall not be taken into account for purposes
of any levy limitations. The obligations may be sold at public
or private sale.
The authority or agency being utilized for this tax
increment financing district, shall be expanded by two members.
The additional two members shall be elected county commissioners
from the taconite tax relief area as defined in Minnesota
Statutes, section 273.134, and appointed by the St. Louis county
board for terms as designated by the county board.
Subd. 2. [CHARACTERISTICS OF THE DISTRICT.] (a) The
district shall be a redevelopment district as defined in
Minnesota Statutes, section 469.174, subdivision 10, except that
the durational limit under Minnesota Statutes, section 469.176,
subdivision 1, paragraph (e), shall be extended to 30 years.
(b) Notwithstanding Minnesota Statutes, section 469.176,
subdivision 4j, the revenue derived from tax increments from
this district, and the proceeds of obligations secured by or
payable from the tax increments, after reduction for costs of
issuance, reserves, and capitalized interest, must be used to
finance, pay, or secure debt service on obligations issued to
finance any portion of the facilities described in section 2,
subdivision 6.
(c) Administrative expenses of the district may be paid out
of the proceeds of the bonds issued under section 4 as the
commissioner of finance determines appropriate and are
appropriated for that purpose.
(d) The provisions of Minnesota Statutes, section 273.1399,
do not apply to the district.
Sec. 26. [PURPOSE.]
The purpose of sections 1 to 25 is to promote the public
welfare, national security, and efficient, safe, and economical
air navigation, commerce, and facilities in or for the benefit
of the state; to foster long-term economic growth and job
creation by financing an aircraft maintenance facility and an
aircraft engine repair facility, to encourage and facilitate the
retention, safe and efficient operation, and expansion of
airports and other air navigation facilities, airline
corporations' facilities, operations and services in the state;
to prevent the loss of jobs, and encourage and promote the
creation of additional jobs in the state in the airline industry
and in other businesses in the state served or affected by the
airline industry; to promote the continued growth, and reduce
the potential for and effects of a decline of economic activity
in the state; and to ensure the preservation, growth, and
diversification of the tax base of the state. State guaranteed
bonds are authorized to be issued and the proceeds of their sale
are appropriated under the authority of the Minnesota
Constitution, article XI, section 5, clauses (a), (d), or (g)
and the proceeds must be applied in a manner consistent with
this authority. In authorizing the financing of the aircraft
facilities, the legislature is acting in all respects for the
benefit of the people of the state of Minnesota to serve the
public purpose of fostering economic development within the
state.
Sec. 27. [EFFECTIVE DATE; LOCAL APPROVAL.]
Section 2, subdivision 4, paragraph (b), is effective on
the day after compliance with Minnesota Statutes, section
645.021, subdivision 3, by the governing body of St. Louis
county. Section 2, subdivision 4, paragraph (c), is effective
on the day after compliance by the governing body of the city of
Duluth with Minnesota Statutes, section 645.021, subdivision 3.
Sections 1 to 16 are effective the day following final enactment
and shall apply to bonds issued to finance a project or projects
for which an agreement was entered into before March 31, 1992,
and to refunding bonds. Section 18 is effective for taxable
years beginning after December 31, 1991.
ARTICLE 2
METROPOLITAN AIRPORTS COMMISSION
Section 1. Minnesota Statutes 1990, section 473.667,
subdivision 8a, is amended to read:
Subd. 8a. [REFUNDING BONDS.] The commission may issue
general obligation revenue refunding bonds to refund bonds
issued pursuant to subdivision 2 this section in accordance with
section 475.67, subdivisions 1 to 11.
Sec. 2. [473.6021] [PUBLIC NECESSITY AND PURPOSE FOR
ISSUANCE OF BONDS.]
In order to accomplish the public purposes set forth in
section 473.602; to encourage and facilitate the retention and
expansion of airline corporations' facilities, operations, and
services in the metropolitan area and the state; to prevent the
loss of jobs and encourage and promote the creation of
additional jobs in the state in the airline industry and in
other businesses in the state served or affected by the airline
industry; to promote the continued growth, and reduce the
potential for and effects of a decline of economic activity in
the metropolitan area and the state; and to ensure the
preservation, growth, and diversification of the tax base of the
metropolitan area and the state; it is necessary and appropriate
and in the public interest to authorize the commission to take
the actions described in section 473.667, subdivision 11, and
section 3.
Sec. 3. Minnesota Statutes 1990, section 473.667, is
amended by adding a subdivision to read:
Subd. 11. [ADDITIONAL BONDS.] (a) The commission may issue
general obligation revenue bonds under this section for the
purposes of:
(1) acquiring by purchase real and personal properties
located within the metropolitan area that are related to airline
operations to be leased to airline corporations, or to other
corporations affiliated by common ownership with airline
corporations, for use in connection with their airline
operations, including real and personal properties for use as
flight training facilities; and
(2) financing or refinancing real and personal properties
owned by the commission which may include discharging a
leasehold interest on the properties to be leased to airline
corporations and used in connection with the operations of the
airline corporations at airports under the commission's
jurisdiction.
Prior to the issuance of the general obligation revenue
bonds, the commission shall enter into a lease with the airline
corporations, or with other corporations affiliated by common
ownership with airline corporations, for the use of the acquired
real and personal properties referenced in clause (1), and shall
enter into a revenue agreement with the airline corporation for
the use of the properties financed or refinanced referenced in
clause (2). The commission shall seek to obtain the best
available terms and security for the lease and agreement. The
terms and security must be reasonably determined by the
commission to be adequate and of the kind and degree which would
be required by an investment banking or other financial
institution. All such properties are airport facilities for
purposes of complying with the provisions of subdivisions 3 and
5.
(b) In addition to the covenants and agreements otherwise
required or negotiated by the commission, the leases and revenue
agreements for the properties must contain covenants and
agreements by the airline corporation, and if the user is not
the airline corporation, also by the airline corporation,
satisfactory to the commission providing for:
(1) the payment of rents in amounts and at times adequate
to pay the principal and interest as due on the general
obligation revenue bonds issued to acquire, finance, or
refinance the properties and to pay the commission's costs and
expenses of issuing the bonds and acquiring and owning the
properties, and otherwise satisfying the requirements of section
469.155, subdivision 5;
(2) the adequate security for payment of rents so that the
net unencumbered value of the leased property described in
paragraph (a), clause (1), and other collateral pledged to the
commission from time to time by the airline corporation, as
independently appraised at the time of issuance and periodically
to the satisfaction of the commission during the term of the
general obligation revenue bonds, is a percentage of the
principal amount of the outstanding general obligation revenue
bonds under this subdivision as determined by the commission;
provided that the percentage determined by the commission must
not be less than 125 percent;
(3) the retention and location of operations and
facilities, including headquarters, of the airline corporation
in the metropolitan area and the state for the term of the lease
and aircraft noise abatement; and
(4) early repayment, or the establishment of a defeasance
account to provide for timely repayment, of the general
obligation revenue bonds upon the occurrence of events and upon
terms and conditions as are satisfactory to the commission,
together with financial requirements and covenants satisfactory
to the commission.
(c) The purchase price of the acquired properties described
in paragraph (a), clause (1), must be in an amount equivalent to
a percentage of its then fair market value as determined by the
commission; provided that the percentage shall not exceed 85
percent. The portion of the general obligation revenue bonds
attributable to the financing or refinancing of the property
described in paragraph (a), clause (2), must be in an amount
equivalent to a percentage of its then fair market value as
determined by the commission; provided that the percentage shall
not exceed 85 percent. The principal amount of the general
obligation revenue bonds issued under this subdivision is
limited to $270,000,000 in excess of the amount authorized by
subdivision 2; provided that the sum of the original principal
amounts of the general obligation revenue bonds issued under
this subdivision, and the revenue bonds issued under section 4,
shall not exceed $390,000,000. Before the commission may issue
the general obligation revenue bonds described in this
subdivision, the commission shall have received, in form and
substance satisfactory to the commission, reports described in
section 4, subdivision 3, relating to the general obligation
revenue bonds.
(d) In addition to other purposes authorized by law, the
proceeds of the general obligation revenue bonds may be used to
fund a debt service reserve account or other reserve account.
Sec. 4. [473.6671] [REVENUE BONDS.]
Subdivision 1. [AUTHORIZATION.] (a) The commission may
issue revenue bonds for the purpose of:
(1) acquiring by purchase real and personal properties
located within the metropolitan area that are related to airline
operations to be leased to airline corporations, or to other
corporations affiliated by common ownership with airline
corporations, for use in connection with their airline
operations, including real and personal properties for use as
flight training facilities; and
(2) financing or refinancing real and personal properties
owned by the commission to be leased to airline corporations and
used in connection with the operations of the airline
corporations at airports under the commission's jurisdiction.
Prior to the issuance of the revenue bonds, the commission
shall enter into a lease with the airline corporations, or with
other corporations affiliated by common ownership with airline
corporations, for the use of such acquired real and personal
properties referenced in clause (1), and shall enter into a
revenue agreement with the airline corporation for the use of
the properties financed or refinanced referenced in clause (2).
The commission shall seek to obtain the best available terms and
security for the lease and agreement. The terms and security
must be reasonably determined by the commission to be adequate
and of the kind and degree which would be required by an
investment banking or other financial institution.
(b) In addition to the covenants and agreements otherwise
required or negotiated by the commission, the leases and revenue
agreements for the properties must contain covenants and
agreements by the airline corporation, and if the user is not
the airline corporation, also by the airline corporation,
satisfactory to the commission providing for:
(1) the payment of rents in amounts and at times adequate
to pay the principal and interest as due on the revenue bonds
issued to acquire, finance, or refinance the properties and to
pay the commission's costs and expenses of issuing the bonds and
acquiring and owning the properties, and otherwise satisfying
the requirements of section 469.155, subdivision 5;
(2) the retention and location of operations and
facilities, including headquarters, of the airline corporation
in the metropolitan area and the state for the term of the
lease;
(3) aircraft noise abatement; and
(4) early repayment, or the establishment of a defeasance
account to provide for timely repayment, of the general
obligation revenue bonds upon the occurrence of events and upon
terms and conditions as are satisfactory to the commission,
together with financial requirements and covenants satisfactory
to the commission.
(c) The sum of the original principal amounts of the
revenue bonds issued under this subdivision, and the general
obligation revenue bonds issued under section 473.667,
subdivision 11, shall not exceed $390,000,000. Except as
provided in this section, the revenue bonds must be issued in
the manner and are subject to the requirements of chapter 475.
Compliance with the requirements of section 475.60 is at the
discretion of the commission. For purposes of this subdivision,
the commission may exercise any powers vested in a redevelopment
agency under sections 469.152 to 469.165.
Subd. 2. [SECURITY AND SOURCE OF PAYMENT.] The revenue
bonds described in subdivision 1 are payable solely from and
secured by the revenues derived by the commission from the
leases upon the properties described in subdivision 1, paragraph
(a), clause (1), the revenue agreements upon the properties
described in subdivision 1, paragraph (a), clause (2), and other
revenues as the commission may designate and pledge which are
derived from the ownership and operation of its airports, air
navigation facilities and other facilities; provided that the
pledge and application of all revenues to the payment and
security of the revenue bonds are subject and subordinate to the
first and prior charge thereon for the payment and security of
the commission's general obligation revenue bonds as provided in
section 473.667. The revenue bonds shall not be payable from or
charged upon any funds or assets of the commission other than
the commission revenues expressly pledged to their payment. An
owner of the revenue bonds may not compel any exercise of the
taxing power of the commission, the state, or any other taxing
jurisdiction. Each bond must state in substance the limited
nature of the obligations. The revenue bonds may be further
secured by an assignment of leases with respect to the
properties acquired, financed, or refinanced by the revenue
bonds, and (i) with respect to the properties described in
subdivision 1, paragraph (a), clause (1), by a mortgage and
security agreement upon the properties and by other collateral
as is pledged to secure the obligations of the airline
corporation or other lessee under the leases on the properties,
and (ii) with respect to the properties described in subdivision
1, paragraph (a), clause (2), by other collateral as is pledged
to secure the obligations of the airline corporation under the
revenue agreements. Any deed granted or received by the
commission and any mortgage granted by the commission in
connection with the issuance of the revenue bonds is exempt from
deed tax and mortgage registry tax imposed under chapter 287.
In the resolution, trust indenture, or other instrument
providing for the issuance of the revenue bonds, the commission
may provide for or require the creation of accounts from sources
specified by the commission for the payment and security of the
revenue bonds, including a debt service reserve account,
separate from the accounts maintained for payment of the general
obligation revenue bonds. The sources specified by the
commission may include a portion of the proceeds of revenue
bonds or payment by the airline corporation. The leases
described in subdivision 1, paragraph (a), clause (1), and the
revenue agreements described in subdivision 1, paragraph (a),
clause (2), must provide that if the commission determines to
pledge any of its revenues to secure the revenue bonds,
including revenues deposited into a debt service reserve account
for the revenue bonds, the airline corporation concurrently
shall pledge assets to the commission as security for repayment
of the pledged revenues so that the net unencumbered values of
the pledged assets, as independently appraised at the time of
issuance and periodically to the satisfaction of the commission
during the term of the revenue bonds, is a percentage of the
amount of commission revenues so pledged as determined by the
commission; provided that the percentage shall not be less than
125 percent.
Subd. 3. [DUE DILIGENCE CONDITIONS.] (a) Before the
commission may issue the revenue bonds described in subdivision
1, the commission must receive, in form and substance
satisfactory to the commission:
(1) a report of audit of the commission's financial records
for the fiscal year most recently ended or, if this is not yet
available, a report for the preceding year, prepared by a
nationally recognized firm of certified public accountants,
showing that the net revenues received that year, computed as
the gross receipts less any refunds of rates, fees, charges, and
rentals for airport and air navigation facilities and service,
and less the aggregate amount of current expenses, paid or
accrued, of operation and maintenance of property and carrying
on the commission's business and activities, equaled or exceeded
the maximum amount of then outstanding bonds of the commission
and interest thereon to become due in any future fiscal year;
(2) a written report, prepared by an independent,
nationally recognized consultant on airport management and
financing engaged by the commission, on the financial condition
of the airline corporation, and any corporations selected by the
commission and affiliated with the corporation by common
ownership, projecting available revenues of the airline
corporation at least sufficient during each year of the term of
the proposed revenue bonds to pay when due all financial
obligations of the airline corporation under the revenue
agreements and leases described in subdivision 1 and stating the
factors on which the projection is based; and
(3) a written report prepared by a nationally recognized
consultant on airport management and financing, projecting
available revenues of the commission at least sufficient during
each year of the term of the proposed revenue bonds to pay all
principal and interest when due on the revenue bonds, and
stating the estimates of air traffic, rate increases, inflation,
and other factors on which the projection is based.
(b) Business plans, financial statements, customer lists,
and market and feasibility studies provided to the consultant or
the commission by the airline company or a related company under
paragraph (a) of this subdivision, are nonpublic data as defined
in section 13.02, subdivision 9.
Sec. 5. Minnesota Statutes 1990, section 473.667, is
amended by adding a subdivision to read:
Subd. 12. [BONDS FOR HEAVY MAINTENANCE FACILITY.] (a) The
commission may issue general obligation revenue bonds under this
section for the purpose of acquisition and betterment of a heavy
maintenance facility for aircraft to be located at
Minneapolis-St. Paul International Airport. The heavy
maintenance facility must be owned by the commission and leased
to and operated by airline corporations, for use by airline
corporations in connection with their airline operations. The
principal amount of the general obligation revenue bonds issued
under this subdivision is limited to $230,000,000 in excess of
the amount authorized by subdivision 2.
(b) To reduce the risk that commission money, including a
property tax levy, will be needed to pay debt service on the
general obligation revenue bonds, the commission must require
that the financing arrangements include a coverage test
satisfactory to the commission, so that the sum of the value of
the assets and other security pledged to the payment of the
general obligation revenue bonds or the rent due under any lease
of the facility and taken into account by the commission is no
less than 125 percent of the difference between the outstanding
general obligation revenue bonds and any cash collateral held in
a debt service reserve fund and pledged to the payment of
principal and interest for the general obligation revenue bonds
and no other bonds. Assets and other security that may be taken
into account include (1) the net unencumbered value of the
facility and any collateral or third party guaranty, including a
letter of credit, pledged or otherwise furnished by a user of
the facility or by a benefited airline company as security for
the payment of rent, (2) the general obligation revenue bond
proceeds, including earnings thereon, and (3) prepayments of
rent, after making such adjustments the commission determines to
be appropriate to take into account any outstanding bonds
secured by a lien on the facility or rent that is prior to the
lien thereon that is securing the general obligation revenue
bonds, but excluding any cash collateral deducted from the
outstanding general obligation revenue bonds in applying the
coverage test. The commission may adopt the method of valuing
the assets and other security it determines to be appropriate,
including valuation of the facility as its original cost less
depreciation. Cash collateral means cash or securities issued
or unconditionally guaranteed as to payment of principal and
interest by the United States of America and maturing or
callable at the option of the holder within two years.
(c) In addition to other purposes authorized by law, the
proceeds of the general obligation revenue bonds may be used to
fund a debt service reserve account or other reserve account.
(d) For purposes of this subdivision, the commission may
exercise any powers vested in a redevelopment agency under
sections 469.152 to 469.165. Any deed granted or received by
the commission and any mortgage granted by the commission in
connection with the issuance of the general obligation revenue
bonds is exempt from deed tax and mortgage registry tax imposed
under chapter 287. The lease must contain covenants and
agreements by the airline corporation and any successor in
interest providing for: (1) the retention and location of
existing employees, operations, and facilities, including
headquarters, of the airline corporation in the state until the
principal and interest on the last series of bonds are paid; and
(2) aircraft noise abatement.
Sec. 6. [473.680] [TAX INCREMENT FINANCING DISTRICT FOR
HEAVY MAINTENANCE FACILITY.]
Subdivision 1. [AUTHORIZATION.] The commission may create
a tax increment financing district as provided in this
subdivision on property located at the Minneapolis-St. Paul
International Airport. Except as otherwise provided in this
section, the provisions of sections 469.174 to 469.179 apply to
the district. The district shall consist of parcels on which
the heavy maintenance facility described in section 473.667,
subdivision 12, is proposed to be located. The commission is
the "authority" for purposes of sections 469.174 to 469.179.
Subd. 2. [CHARACTERISTICS OF THE DISTRICT.] (a) The
district shall be an economic development district as defined in
section 469.174, subdivision 12.
(b) Notwithstanding section 469.176, subdivision 4c, the
revenue derived from tax increment from the district must be
used only to pay debt service on general obligation revenue
bonds issued by the commission under section 473.667,
subdivision 12.
Sec. 7. [EFFECTIVE DATES; APPLICATION.]
Sections 1 to 6 are effective the day following final
enactment and shall apply to bonds issued to finance or
refinance a facility or facilities or property for which an
agreement was entered into before March 31, 1992, or to bonds
issued to refund the bonds. This article applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.
ARTICLE 3
INTERGOVERNMENTAL COORDINATION
Section 1. [INTERAGENCY TASK FORCE.]
Subdivision 1. [PURPOSE.] There is established an
interagency task force to coordinate the financial transactions
authorized by this act, including bonds, financial assistance,
and loan, lease, and other revenue agreements. The task force
consists of the commissioners of finance, trade and economic
development, and revenue and the chair of the metropolitan
airports commission. The mayors of the cities of Duluth and
Hibbing and the chair of the St. Louis county board and the
commissioner of the iron range resources and rehabilitation
board are members of the task force for purposes of financial
transactions related to projects described in article 1, section
2, subdivisions 5 and 6. The commissioner of finance is the
chair of the task force. To complete its work, the task force
shall use staff and consultant services made available by the
governmental units and agencies represented on the task force.
Subd. 2. [DUTIES.] The task force shall coordinate the
negotiation of financial transactions under this act by the
governmental agencies and units represented on the task force.
The task force shall advise and make recommendations to the
responsible public agencies and units on the following matters:
(1) the financial assistance to be provided;
(2) financial commitments by state, metropolitan, and local
agencies, including any arrangements related to state,
metropolitan, and local debt, taxes, financing, and debt
service;
(3) loan, lease, or other revenue agreements;
(4) the financial commitments of lessees of projects
financed or refinanced with financial assistance under this act,
and any related persons, and the estimates of business and
financial conditions, economic activity, air traffic, and other
factors that have been used in assessing the capability of the
lessees and any related persons to meet their financial
commitments.
Sec. 2. [STATE AND METROPOLITAN BONDS; REVIEW AND
APPROVAL.]
The metropolitan airports commission may not issue bonds
authorized by this act without the approval of the commissioner
of finance and the legislative commission on planning and fiscal
policy, provided that the provisions of article 1, section 15,
specifically apply to this approval requirement. Before the
commissioner of finance issues bonds authorized by this act, the
commissioner shall report the amount of bonds to be issued, a
detailed description of the projects and facilities to be
financed by the bonds, and the terms of the lease, loan, and
revenue agreements to the legislative commission on planning and
fiscal policy for its advisory recommendation. The
recommendation is positive if not received by the commission or
commissioner within ten days.
Presented to the governor May 28, 1991
Signed by the governor May 30, 1991, 12:52 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes