Minnesota Session Laws - 1992, Regular Session

  

                         Laws of Minnesota 1992 

                        CHAPTER 543-S.F.No. 1648 
           An act relating to the agricultural economy; 
          authorizing the commissioner of finance to issue 
          obligations to assist in the use of 
          agricultural-industrial facilities in the city of 
          Detroit Lakes. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [PURPOSE.] 
    The purpose of sections 1 to 14 is to develop the state's 
agricultural resources by extending credit on real estate 
security; to foster long-term economic growth and job creation 
by financing an agricultural-industrial facility; to prevent the 
loss of jobs and encourage and promote the creation of 
additional jobs in the state in the agricultural industry and in 
other businesses in the state served or affected by the 
agricultural 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 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, clause (h), and the proceeds must be 
applied in a manner consistent with this authority.  In 
authorizing the financing of an agricultural-industrial 
facility, the legislature is acting in all respects for the 
benefit of the people of the state of Minnesota to serve the 
public purposes of developing the state's agricultural resources 
and fostering economic development within the state. 
    Sec. 2.  [BOND ISSUE; SALE AUTHORIZATION.] 
    Subdivision 1.  [GENERAL AUTHORIZATION; MAXIMUM PRINCIPAL 
AMOUNTS.] The commissioner of finance may issue and sell bonds 
of the state in one or more series or issues for the purposes 
provided in this section in the aggregate principal amount of up 
to $5,000,000 under the bonding authority specified in Minnesota 
Statutes, section 41B.19, subdivision 1.  Bonds issued under 
this subdivision, other than refunding bonds, must be counted 
against the bonding limit imposed under section 41B.19, 
subdivision 1.  Bonds to refund the foregoing bonds may be 
issued in the aggregate principal amount of up to $5,000,000, as 
provided in section 4, subdivision 2.  Unless the context 
otherwise clearly requires, the reference to bonds shall include 
refunding bonds.  Proceeds of the bonds and investment income on 
the proceeds are appropriated for the purposes specified in this 
section and section 4, subdivision 2. 
    Subd. 2.  [LOAN, LEASE, AND REVENUE AGREEMENTS.] The 
commissioner of finance may loan the proceeds of the bonds or 
enter into lease agreements or other revenue agreements for the 
financing of an agricultural-industrial facility located in the 
city of Detroit Lakes.  The facility may be owned by or leased 
to and the loan or loans may be made to a public body or any 
other person, public or private.  Any loan, or if no loan has 
been made, any lease for the facility must require payments 
which, if timely paid when due, will be sufficient to pay when 
due all principal, interest, and premium scheduled to be payable 
on the bonds or any refunding bonds, unless a default has 
occurred under the loan or lease or any prior loan or lease.  
Any lease may provide for an option of the lessee to purchase 
all or any part of the facility at any price which the 
commissioner of finance may approve.  The commissioner may 
provide for servicing of the loans and agreements, the times 
they are payable and the amount of payments, the amount of the 
loans and agreements, their security, and other terms, 
conditions, and provisions necessary or convenient in connection 
with them.  The commissioner may enter into all necessary 
contracts and security instruments.  All property financed in 
whole or in part with sale proceeds of the bonds or investment 
income from the proceeds must be pledged as collateral for the 
loans made or bonds issued under this section so long as no 
default has occurred under a loan. 
    Subd. 3.  [NONPUBLIC DATA.] Business plans, financial 
statements, customer lists, and market and feasibility studies 
submitted in connection with the provision of financial 
assistance are nonpublic data, as defined in Minnesota Statutes, 
section 13.02, subdivision 9.  The commissioner may make the 
data accessible to any person, agency, or public entity if the 
commissioner determines that access is required under state or 
federal securities law.  To the extent provided by an order of 
the commissioner of finance, the bonds shall be payable first 
from revenues derived from the loan of bond proceeds or the 
lease of the facility, or any other amounts provided for in 
section 5, subdivision 2. 
    Subd. 4.  [SECURITY.] The bonds are directly secured by a 
pledge of the full faith, credit, and taxing power of the state 
and must be issued in accordance with the Minnesota 
Constitution, article XI, sections 4 to 7.  Bonds issued under 
this section are not subject to Minnesota Statutes, section 
16B.06. 
    Subd. 5.  [USE OF PROCEEDS.] The proceeds of the bonds 
issued in a principal amount not to exceed $5,000,000 may be 
used to finance the costs of acquiring, renovating, improving, 
or equipping all or any portion of an agricultural-industrial 
facility for processing turkeys or other agricultural products, 
and facilities related and subordinate to the facility, located 
in the city of Detroit Lakes and any costs of issuance, 
reserves, credit enhancement, or an initial period of interest 
payments related to the bonds or the facility or working 
capital.  The bond proceeds are appropriated to the commissioner 
for the purposes specified in this section.  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 the facility.  The mortgage is exempt from the 
mortgage registry tax imposed under Minnesota Statutes, 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 
commissioner's approval is not required if the bond trustee has 
taken control of the facility as a result of a default. 
    Sec. 3.  [GENERAL POWERS.] 
    For the purpose of exercising the specific powers 
authorized under sections 1 to 14 and effectuating the other 
purposes of sections 1 to 14, 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; 
    (2) enter into agreements, contracts, or other transactions 
with any federal or state agency or other governmental unit, 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 14; 
    (3) acquire real property, or an interest therein, by 
purchase or foreclosure; 
    (4) enter into agreements with lenders, borrowers, or the 
issuers of securities for the purpose of regulating the 
development and management of any property financed in whole or 
in part by the proceeds of bonds or loans; and 
    (5) 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 14 and to carry out the 
objectives of sections 1 to 14 and may pay for the services from 
bond proceeds or otherwise available department money. 
    Sec. 4.  [APPLICABLE LAWS; REFUNDING BONDS.] 
    Subdivision 1.  [BONDS.] Minnesota Statutes, sections 
16A.631 to 16A.675, do not apply to the bonds authorized under 
section 2, except as provided in an order of the commissioner of 
finance or indenture authorizing the bonds, and except that 
Minnesota Statutes, sections 16A.641, 16.672, and 16A.675, other 
than section 16A.641, subdivisions 4 and 5, shall apply.  
    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, or redemption.  Any such escrowed proceeds, pending 
such use, may be invested and reinvested in obligations that are 
authorized investments under Minnesota Statutes, 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. 
    Subd. 3.  [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.  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.  [AUTHORIZING ORDERS, TERMS, SALE, AND REVENUE 
SOURCES.] 
    Subdivision 1.  [TERMS.] The bonds must be authorized by an 
order or orders of the commissioner of finance, 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 REVENUES.] The bonds and interest 
payable thereon are payable from the following sources and are 
irrevocably appropriated for that purpose, but only to the 
extent provided in the order of the commissioner of finance or 
indenture authorizing or securing the bonds: 
    (1) revenues of any nature derived from the ownership, 
lease, operation, sale, foreclosure, or refinancing of a 
facility described in section 2; 
    (2) repayments of any loans made under sections 1 to 14; 
    (3) proceeds of any bonds; 
    (4) amounts in any account authorized by section 11 or 13; 
    (5) amounts payable under any insurance policy, guaranty, 
letter of credit, or other instrument securing the bonds; 
    (6) any other revenues which the commissioner may pledge 
but excluding state appropriations unless the appropriation was 
specifically designated for that purpose; and 
    (7) investment income on any of the sources specified in 
clauses (1) to (6). 
    Sec. 6.  [OPTIONAL ORDER AND CONTRACT PROVISIONS.] 
    Any order of the commissioner of finance 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 Minnesota Statutes, 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 14, 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.  [PLEDGES; VALIDITY.] 
    Any pledge made by the commissioner of finance 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 of finance, 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.  Upon 
the finding of the commissioner of finance by order or in an 
indenture that all proceedings, actions, and events required for 
the valid issuance and sale of any issue of bonds have occurred, 
upon issuance all the proceedings, actions, or events shall be 
considered to have conclusively occurred at or prior to the 
issuance. 
    Sec. 8.  [BONDS; NONLIABILITY OF INDIVIDUALS.] 
    The commissioner of finance 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.  [BONDS; PURCHASE AND CANCELLATION.] 
    The commissioner of finance, 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.  [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 of finance 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 14.  
    Sec. 11.  [FUNDS AND DEBT SERVICE ACCOUNTS.] 
    Subdivision 1.  [FUNDS.] The commissioner of finance or any 
trustee appointed by the commissioner under sections 1 to 14 
shall establish and maintain an agricultural-industrial 
facilities fund for the facilities described in section 2.  
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 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 the facilities 
described in section 2 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 the purposes 
of sections 1 to 14.  All deposits into and disbursements from 
accounts for the purposes and from the sources of revenue 
authorized by sections 1 to 14 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 of finance under sections 1 to 14 
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. 
    Sec. 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 of finance 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 14; 
    (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.  [DEBT SERVICE RESERVE ACCOUNT.] 
    Subdivision 1.  [AUTHORITY.] The commissioner of finance 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.  [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. 4.  [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. 5.  [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.  [CONSTRUCTION.] 
    Sections 1 to 14 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.  [DETROIT LAKES; FACILITIES.] 
    The commissioner of trade and economic development may 
assist the people of the city of Detroit Lakes to make economic 
use of agricultural-industrial facilities in the city.  The 
commissioner may use all authority under existing law for this 
purpose.  The commissioner may employ marketing analysts and 
other consultants as necessary. 
    Presented to the governor April 17, 1992 
    Signed by the governor April 29, 1992, 8:05 a.m.