Office of the Revisor of Statutes
Minnesota Session Laws - 1994, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 614-H.F.No. 3193
An act relating to public finance; providing
conditions and requirements for the issuance of debt;
allowing school districts to make and levy for certain
contract or lease purchases; authorizing the use of
revenue recapture by certain housing agencies;
clarifying a property tax exemption; authorizing use
of special assessments for on-site water contamination
improvements; authorizing an increase in the
membership of county housing and redevelopment
authorities; amending Minnesota Statutes 1992,
sections 270A.03, subdivision 2; 383.06, subdivision
2; 429.011, by adding a subdivision; 429.031,
subdivision 3; 469.006, subdivision 1; 469.015,
subdivision 4; 469.158; 469.184, by adding a
subdivision; 471.56, subdivision 5; 471.562,
subdivision 3, and by adding a subdivision; 475.53,
subdivision 5; 475.54, subdivision 16; and 475.66,
subdivision 1; Minnesota Statutes 1993 Supplement,
sections 124.91, subdivision 3; 272.02, subdivision 1;
and 469.033, subdivision 6; proposing coding for new
law in Minnesota Statutes, chapter 469.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1993 Supplement, section
124.91, subdivision 3, is amended to read:
Subd. 3. [POST-JUNE 1992 LEASE PURCHASE, INSTALLMENT
BUYS.] (a) Upon application to, and approval by, the
commissioner in accordance with the procedures and limits in
subdivision 1, a district, as defined in this subdivision, may:
(1) purchase real or personal property under an installment
contract or may lease real or personal property with an option
to purchase under a lease purchase agreement, by which
installment contract or lease purchase agreement title is kept
by the seller or vendor or assigned to a third party as security
for the purchase price, including interest, if any; and
(2) annually levy the amounts necessary to pay the
district's obligations under the installment contract or lease
purchase agreement.
(b)(1) The obligation created by the installment contract
or the lease purchase agreement must not be included in the
calculation of net debt for purposes of section 475.53, and does
not constitute debt under other law.
(2) An election is not required in connection with the
execution of the installment contract or the lease purchase
agreement.
(c) The proceeds of the levy authorized by this subdivision
must not be used to acquire a facility to be primarily used for
athletic or school administration purposes.
(d) In this subdivision, "district" means:
(1) a school district required to have a comprehensive plan
for the elimination of segregation whose plan has been
determined by the commissioner to be in compliance with the
state board of education rules relating to equality of
educational opportunity and school desegregation; or
(2) a school district that participates in a joint program
for interdistrict desegregation with a district defined in
clause (1) if the facility acquired under this subdivision is to
be primarily used for the joint program.
(e) Notwithstanding subdivision 1, the prohibition against
a levy by a district to lease or rent a district-owned building
to itself does not apply to levies otherwise authorized by this
subdivision.
(f) Projects may be approved under this section by the
commissioner in fiscal years 1993, 1994, and 1995 only.
(g) For the purposes of this subdivision, any references in
subdivision 1 to building or land shall be deemed to include
personal property.
Sec. 2. Minnesota Statutes 1992, section 270A.03,
subdivision 2, is amended to read:
Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any
state agency, as defined by section 14.02, subdivision 2, the
regents of the University of Minnesota, any district court of
the state, any county, any statutory or home rule charter city
presenting a claim for a municipal hospital, a hospital
district, any public agency responsible for child support
enforcement, and any public agency responsible for the
collection of court-ordered restitution, and any public agency
established by general or special law that is responsible for
the administration of a low-income housing program.
Sec. 3. Minnesota Statutes 1993 Supplement, section
272.02, subdivision 1, is amended to read:
Subdivision 1. All property described in this section to
the extent herein limited shall be exempt from taxation:
(1) all public burying grounds;
(2) all public schoolhouses;
(3) all public hospitals;
(4) all academies, colleges, and universities, and all
seminaries of learning;
(5) all churches, church property, and houses of worship;
(6) institutions of purely public charity except parcels of
property containing structures and the structures described in
section 273.13, subdivision 25, paragraph (c), clauses (1), (2),
and (3), or paragraph (d), other than those that qualify for
exemption under clause (25);
(7) all public property exclusively used for any public
purpose;
(8) except for the taxable personal property enumerated
below, all personal property and the property described in
section 272.03, subdivision 1, paragraphs (c) and (d), shall be
exempt.
The following personal property shall be taxable:
(a) personal property which is part of an electric
generating, transmission, or distribution system or a pipeline
system transporting or distributing water, gas, crude oil, or
petroleum products or mains and pipes used in the distribution
of steam or hot or chilled water for heating or cooling
buildings and structures;
(b) railroad docks and wharves which are part of the
operating property of a railroad company as defined in section
270.80;
(c) personal property defined in section 272.03,
subdivision 2, clause (3);
(d) leasehold or other personal property interests which
are taxed pursuant to section 272.01, subdivision 2; 273.124,
subdivision 7; or 273.19, subdivision 1; or any other law
providing the property is taxable as if the lessee or user were
the fee owner;
(e) manufactured homes and sectional structures, including
storage sheds, decks, and similar removable improvements
constructed on the site of a manufactured home, sectional
structure, park trailer or travel trailer as provided in section
273.125, subdivision 8, paragraph (f); and
(f) flight property as defined in section 270.071.
(9) Personal property used primarily for the abatement and
control of air, water, or land pollution to the extent that it
is so used, and real property which is used primarily for
abatement and control of air, water, or land pollution as part
of an agricultural operation, as a part of a centralized
treatment and recovery facility operating under a permit issued
by the Minnesota pollution control agency pursuant to chapters
115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730,
and 7045.0020 to 7045.1260, as a wastewater treatment facility
and for the treatment, recovery, and stabilization of metals,
oils, chemicals, water, sludges, or inorganic materials from
hazardous industrial wastes, or as part of an electric
generation system. For purposes of this clause, personal
property includes ponderous machinery and equipment used in a
business or production activity that at common law is considered
real property.
Any taxpayer requesting exemption of all or a portion of
any real property or any equipment or device, or part thereof,
operated primarily for the control or abatement of air or water
pollution shall file an application with the commissioner of
revenue. The equipment or device shall meet standards, rules,
or criteria prescribed by the Minnesota pollution control
agency, and must be installed or operated in accordance with a
permit or order issued by that agency. The Minnesota pollution
control agency shall upon request of the commissioner furnish
information or advice to the commissioner. On determining that
property qualifies for exemption, the commissioner shall issue
an order exempting the property from taxation. The equipment or
device shall continue to be exempt from taxation as long as the
permit issued by the Minnesota pollution control agency remains
in effect.
(10) Wetlands. For purposes of this subdivision,
"wetlands" means: (i) land described in section 103G.005,
subdivision 18; (ii) land which is mostly under water, produces
little if any income, and has no use except for wildlife or
water conservation purposes, provided it is preserved in its
natural condition and drainage of it would be legal, feasible,
and economically practical for the production of livestock,
dairy animals, poultry, fruit, vegetables, forage and grains,
except wild rice; or (iii) land in a wetland preservation area
under sections 103F.612 to 103F.616. "Wetlands" under items (i)
and (ii) include adjacent land which is not suitable for
agricultural purposes due to the presence of the wetlands, but
do not include woody swamps containing shrubs or trees, wet
meadows, meandered water, streams, rivers, and floodplains or
river bottoms. Exemption of wetlands from taxation pursuant to
this section shall not grant the public any additional or
greater right of access to the wetlands or diminish any right of
ownership to the wetlands.
(11) Native prairie. The commissioner of the department of
natural resources shall determine lands in the state which are
native prairie and shall notify the county assessor of each
county in which the lands are located. Pasture land used for
livestock grazing purposes shall not be considered native
prairie for the purposes of this clause. Upon receipt of an
application for the exemption provided in this clause for lands
for which the assessor has no determination from the
commissioner of natural resources, the assessor shall refer the
application to the commissioner of natural resources who shall
determine within 30 days whether the land is native prairie and
notify the county assessor of the decision. Exemption of native
prairie pursuant to this clause shall not grant the public any
additional or greater right of access to the native prairie or
diminish any right of ownership to it.
(12) Property used in a continuous program to provide
emergency shelter for victims of domestic abuse, provided the
organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1986, notwithstanding the fact that the sponsoring organization
receives funding under section 8 of the United States Housing
Act of 1937, as amended.
(13) If approved by the governing body of the municipality
in which the property is located, property not exceeding one
acre which is owned and operated by any senior citizen group or
association of groups that in general limits membership to
persons age 55 or older and is organized and operated
exclusively for pleasure, recreation, and other nonprofit
purposes, no part of the net earnings of which inures to the
benefit of any private shareholders; provided the property is
used primarily as a clubhouse, meeting facility, or recreational
facility by the group or association and the property is not
used for residential purposes on either a temporary or permanent
basis.
(14) To the extent provided by section 295.44, real and
personal property used or to be used primarily for the
production of hydroelectric or hydromechanical power on a site
owned by the state or a local governmental unit which is
developed and operated pursuant to the provisions of section
103G.535.
(15) If approved by the governing body of the municipality
in which the property is located, and if construction is
commenced after June 30, 1983:
(a) a "direct satellite broadcasting facility" operated by
a corporation licensed by the federal communications commission
to provide direct satellite broadcasting services using direct
broadcast satellites operating in the 12-ghz. band; and
(b) a "fixed satellite regional or national program service
facility" operated by a corporation licensed by the federal
communications commission to provide fixed satellite-transmitted
regularly scheduled broadcasting services using satellites
operating in the 6-ghz. band.
An exemption provided by clause (15) shall apply for a period
not to exceed five years. When the facility no longer qualifies
for exemption, it shall be placed on the assessment rolls as
provided in subdivision 4. Before approving a tax exemption
pursuant to this paragraph, the governing body of the
municipality shall provide an opportunity to the members of the
county board of commissioners of the county in which the
facility is proposed to be located and the members of the school
board of the school district in which the facility is proposed
to be located to meet with the governing body. The governing
body shall present to the members of those boards its estimate
of the fiscal impact of the proposed property tax exemption.
The tax exemption shall not be approved by the governing body
until the county board of commissioners has presented its
written comment on the proposal to the governing body or 30 days
have passed from the date of the transmittal by the governing
body to the board of the information on the fiscal impact,
whichever occurs first.
(16) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used in the generation and distribution of
hot water for heating buildings and structures.
(17) Notwithstanding section 273.19, state lands that are
leased from the department of natural resources under section
92.46.
(18) Electric power distribution lines and their
attachments and appurtenances, that are used primarily for
supplying electricity to farmers at retail.
(19) Transitional housing facilities. "Transitional
housing facility" means a facility that meets the following
requirements. (i) It provides temporary housing to individuals,
couples, or families. (ii) It has the purpose of reuniting
families and enabling parents or individuals to obtain
self-sufficiency, advance their education, get job training, or
become employed in jobs that provide a living wage. (iii) It
provides support services such as child care, work readiness
training, and career development counseling; and a
self-sufficiency program with periodic monitoring of each
resident's progress in completing the program's goals. (iv) It
provides services to a resident of the facility for at least
three months but no longer than three years, except residents
enrolled in an educational or vocational institution or job
training program. These residents may receive services during
the time they are enrolled but in no event longer than four
years. (v) It is owned and operated or under lease from a unit
of government or governmental agency under a property
disposition program and operated by one or more organizations
exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code of 1986, as amended through December 31,
1987. This exemption applies notwithstanding the fact that the
sponsoring organization receives financing by a direct federal
loan or federally insured loan or a loan made by the Minnesota
housing finance agency under the provisions of either Title II
of the National Housing Act or the Minnesota housing finance
agency law of 1971 or rules promulgated by the agency pursuant
to it, and notwithstanding the fact that the sponsoring
organization receives funding under Section 8 of the United
States Housing Act of 1937, as amended.
(20) Real and personal property, including leasehold or
other personal property interests, owned and operated by a
corporation if more than 50 percent of the total voting power of
the stock of the corporation is owned collectively by: (i) the
board of regents of the University of Minnesota, (ii) the
University of Minnesota Foundation, an organization exempt from
federal income taxation under section 501(c)(3) of the Internal
Revenue Code of 1986, as amended through December 31, 1990, and
(iii) a corporation organized under chapter 317A, which by its
articles of incorporation is prohibited from providing pecuniary
gain to any person or entity other than the regents of the
University of Minnesota; which property is used primarily to
manage or provide goods, services, or facilities utilizing or
relating to large-scale advanced scientific computing resources
to the regents of the University of Minnesota and others.
(21) Wind energy conversion systems, as defined in section
216C.06, subdivision 12, installed after January 1, 1991, and
used as an electric power source.
(22) Containment tanks, cache basins, and that portion of
the structure needed for the containment facility used to
confine agricultural chemicals as defined in section 18D.01,
subdivision 3, as required by the commissioner of agriculture
under chapter 18B or 18C.
(23) Photovoltaic devices, as defined in section 216C.06,
subdivision 13, installed after January 1, 1992, and used to
produce or store electric power.
(24) Real and personal property owned and operated by a
private, nonprofit corporation exempt from federal income
taxation pursuant to United States Code, title 26, section
501(c)(3), primarily used for an ice arena or ice rink, and used
primarily for youth and high school programs.
(25) A structure that is situated on real property that is
used for:
(i) housing for the elderly or for low- and moderate-income
families as defined in Title II of the National Housing Act, as
amended through December 31, 1990, and funded by a direct
federal loan or federally insured loan made pursuant to Title II
of the act; or
(ii) housing lower income families or elderly or
handicapped persons, as defined in section 8 of the United
States Housing Act of 1937, as amended; and which meets each of
the following criteria:
(A) is owned by an entity which is operated as a nonprofit
corporation organized under chapter 317A;
(B) is owned by an entity which has not entered into a
housing assistance payments contract under section 8 of the
United States Housing Act of 1937, or, if the entity which owns
the structure has entered into a housing assistance payments
contract under section 8 of the United States Housing Act of
1937, the contract provides assistance for less than 90 percent
of the dwelling units in the structure, excluding dwelling units
intended for management or maintenance personnel;
(C) operates an on-site congregate dining program in which
participation by residents is mandatory, and provides assisted
living or similar social and physical support services for
residents; and
(D) was not assessed and did not pay tax under chapter 273
prior to the 1991 levy, while meeting the other conditions of
this clause.
An exemption under this clause remains in effect for taxes
levied in each year or partial year of the term of its permanent
financing.
(26) Real and personal property that is located in the
Superior National Forest, and owned or leased and operated by a
nonprofit organization that is exempt from federal income
taxation under section 501(c)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1992, and primarily used
to provide recreational opportunities for disabled veterans and
their families.
(27) Manure pits and appurtenances, which may include
slatted floors and pipes, installed or operated in accordance
with a permit, order, or certificate of compliance issued by the
Minnesota pollution control agency. The exemption shall
continue for as long as the permit, order, or certificate issued
by the Minnesota pollution control agency remains in effect.
(28) Real property acquired by a home rule charter city,
statutory city, county, town, or school district under a lease
purchase agreement or an installment purchase contract during
the term of the lease purchase agreement as long as and to the
extent that the property is used by the city, county, town, or
school district and devoted to a public use and to the extent it
is not subleased to any private individual, entity, association,
or corporation in connection with a business or enterprise
operated for profit.
Sec. 4. Minnesota Statutes 1992, section 383.06,
subdivision 2, is amended to read:
Subd. 2. [TAX ANTICIPATION CERTIFICATES.] The county board
of any county may, by resolution, issue and sell as many
certificates of indebtedness as may be needed in anticipation of
the collection of taxes levied for any fund named in the tax
levy for the purpose of raising money for such fund, but the
certificates outstanding for any such separate funds shall
not at any time on the date on which the certificates are issued
exceed 50 75 percent of the amount of taxes previously levied
for such fund remaining uncollected. No certificate shall be
issued to become due and payable later than 15 months after the
deadline for the certification of the property tax levy under
section 275.07, subdivision 1, and the certificates shall not be
sold for less than par and accrued interest. The certificates
of indebtedness may be issued at any time after the levy has
been finally made and certified to the county auditor. Each
certificate shall state upon its face for which fund the
proceeds thereof shall be used, the total amount of certificates
so issued, and the whole amount embraced in the levy for that
particular purpose. They shall be numbered consecutively, be in
denominations of $100 or a multiple thereof, may have interest
coupons attached, shall be otherwise of such form and terms, and
may be made payable at such place, as will best aid in their
negotiation, and the proceeds of the tax assessed and collected
on account of the fund and the full faith and credit of the
county shall be irrevocably pledged for the redemption and
payment of the certificates so issued. Such certificates shall
be payable primarily from the moneys derived from the levy for
the years against which such certificates were issued, but shall
constitute unlimited general obligations of the county. Money
derived from the sale of such certificates shall be credited to
the fund or funds the taxes for which are so anticipated.
Sec. 5. Minnesota Statutes 1992, section 429.011, is
amended by adding a subdivision to read:
Subd. 16. "On-site water contaminant improvements" means
pipes, wells, and other devices and equipment installed in or
outside a building for the primary purpose of eliminating water
contamination caused by lead or other toxic or health
threatening substances in the water, whether the improvements so
installed are publicly or privately owned.
Sec. 6. Minnesota Statutes 1992, section 429.031,
subdivision 3, is amended to read:
Subd. 3. [PETITION BY ALL OWNERS.] Whenever all owners of
real property abutting upon any street named as the location of
any improvement shall petition the council to construct the
improvement and to assess the entire cost against their
property, the council may, without a public hearing, adopt a
resolution determining such fact and ordering the improvement.
The validity of the resolution shall not be questioned by any
taxpayer or property owner or the municipality unless an action
for that purpose is commenced within 30 days after adoption of
the resolution as provided in section 429.036. Nothing herein
prevents any property owner from questioning the amount or
validity of the special assessment against the owner's property
pursuant to section 429.081. In the case of a petition for the
installation of municipality to own and install a fire
protection or system, a pedestrian skyway system, or on-site
water contaminant improvements, the petition must contain or be
accompanied by an undertaking satisfactory to the city by the
petitioner that the petitioner will grant the municipality the
necessary property interest in the building to permit the city
to enter upon the property and the building to construct,
maintain, and operate the fire protection or system, pedestrian
skyway system, or on-site water contaminant improvements. In
the case of a petition for the installation of a privately owned
fire protection or system, a privately owned pedestrian skyway
system which will be privately owned, or privately owned on-site
water contaminant improvements, the petition shall also contain
the plans and specifications for the improvement, the estimated
cost of the improvement and a statement indicating whether the
city or the owner will contract for the construction of the
improvement. If the owner is contracting for the construction
of the improvement, the city shall not approve the petition
until it has reviewed and approved the plans, specifications,
and cost estimates contained in the petition. The construction
cost financed under section 429.091 shall not exceed the amount
of the cost estimate contained in the petition. In the case of a
petition for the installation of a fire protection or system, a
pedestrian skyway system, or on-site water contaminant
improvements, the petitioner may request abandonment of the
improvement at any time after it has been ordered pursuant to
subdivision 1 and before contracts have been awarded for the
construction of the improvement under section 429.041,
subdivision 2. If such a request is received, the city council
shall abandon the proceedings but in such case the petitioner
shall reimburse the city for any and all expenses incurred by
the city in connection with the improvement.
Sec. 7. Minnesota Statutes 1992, section 469.006,
subdivision 1, is amended to read:
Subdivision 1. [COUNTY COMMISSIONERS.] When the governing
body of a county adopts a resolution under section 469.004, the
governing body shall appoint five persons or the number of
commissioners for the governing body as commissioners of the
county authority. The membership of the commission will reflect
an areawide distribution on a representative basis. The
commissioners who are first appointed shall be designated to
serve for terms of one, two, three, four, and five years
respectively, from the date of their appointment. Thereafter
commissioners shall be appointed for a term of office of five
years except that all vacancies shall be filled for the
unexpired term. Persons may be appointed as commissioners if
they reside within the boundaries or area, and are otherwise
eligible for the appointments under sections 469.001 to 469.047.
Sec. 8. Minnesota Statutes 1992, section 469.015,
subdivision 4, is amended to read:
Subd. 4. [EXCEPTIONS.] (a) An authority need not require
competitive bidding in the following circumstances:
(1) in the case of a contract for the acquisition of a
low-rent housing project:
(i) for which financial assistance is provided by the
federal government;
(ii) which does not require any direct loan or grant of
money from the municipality as a condition of the federal
financial assistance; and
(iii) for which the contract provides for the construction
of the project upon land that is either owned by the authority
for redevelopment purposes or not owned by the authority at the
time of the contract but the contract provides for the
conveyance or lease to the authority of the project or
improvements upon completion of construction;
(2) with respect to a structured parking facility:
(i) constructed in conjunction with, and directly above or
below, a development; and
(ii) financed with the proceeds of tax increment or parking
ramp revenue bonds; and
(3) in the case of any building in which at least 75
percent of the useable square footage constitutes a housing
development project if:
(i) the project is financed with the proceeds of bonds
issued under section 469.034 or from nongovernmental sources;
(ii) the project is either located on land that is owned or
is being acquired by the authority only for development
purposes, or is not owned by the authority at the time the
contract is entered into but the contract provides for
conveyance or lease to the authority of the project or
improvements upon completion of construction; and
(iii) the authority finds and determines that elimination
of the public bidding requirements is necessary in order for the
housing development project to be economical and feasible.
(b) An authority need not require a performance bond for
the following projects:
(1) a contract described in paragraph (a), clause (1);
(2) a construction change order for a housing project in
which 30 percent of the construction has been completed;
(3) a construction contract for a single-family housing
project in which the authority acts as the general construction
contractor; or
(4) a services or materials contract for a housing project.
For purposes of this paragraph, "services or materials
contract" does not include construction contracts.
Sec. 9. Minnesota Statutes 1993 Supplement, section
469.033, subdivision 6, is amended to read:
Subd. 6. [OPERATION AREA AS TAXING DISTRICT, SPECIAL TAX.]
All of the territory included within the area of operation of
any authority shall constitute a taxing district for the purpose
of levying and collecting special benefit taxes as provided in
this subdivision. All of the taxable property, both real and
personal, within that taxing district shall be deemed to be
benefited by projects to the extent of the special taxes levied
under this subdivision. Subject to the consent by resolution of
the governing body of the city in and for which it was created,
an authority may levy each year a tax upon all taxable property
within that taxing district. The authority shall certify the
tax to the auditor of the county in which the taxing district is
located on or before five working days after December 20 in each
year. The tax shall be extended, spread, and included with and
as a part of the general taxes for state, county, and municipal
purposes by the county auditor, to be collected and enforced
therewith, together with the penalty, interest, and costs. As
the tax, including any penalties, interest, and costs, is
collected by the county treasurer it shall be accumulated and
kept in a separate fund to be known as the "housing and
redevelopment project fund." The money in the fund shall be
turned over to the authority at the same time and in the same
manner that the tax collections for the city are turned over to
the city, and shall be expended only for the purposes of
sections 469.001 to 469.047. It shall be paid out upon vouchers
signed by the chair of the authority or an authorized
representative. The amount of the levy shall be an amount
approved by the governing body of the city, but shall not exceed
0.0131 percent of taxable market value. The authority may levy
an additional levy, not to exceed 0.0013 percent of taxable
market value, to be used to defray costs of providing
informational service and relocation assistance as set forth in
section 469.012, subdivision 1. The authority shall each year
formulate and file a budget in accordance with the budget
procedure of the city in the same manner as required of
executive departments of the city or, if no budgets are required
to be filed, by August 1. The amount of the tax levy for the
following year shall be based on that budget and shall be
approved by the governing body.
Sec. 10. Minnesota Statutes 1992, section 469.158, is
amended to read:
469.158 [MANNER OF ISSUANCE OF BONDS; INTEREST RATE.]
Bonds authorized under sections 469.152 to 469.165 must be
issued in accordance with the provisions of chapter 475 relating
to bonds payable from income of revenue producing conveniences,
except that public sale is not required, the provisions of
sections 475.62 and 475.63 do not apply, and the bonds may
mature at the time or times, in the amount or amounts, within 30
years from date of issue, and may be sold at a price equal to
the percentage of the par value thereof, plus accrued interest,
and bearing interest at the rate or rates agreed by the
contracting party, the purchaser, and the municipality or
redevelopment agency, notwithstanding any limitation of interest
rate or cost or of the amounts of annual maturities contained in
any other law. Bonds issued to refund bonds previously issued
pursuant to sections 469.152 to 469.165 may be issued in amounts
determined by the municipality or redevelopment agency
notwithstanding the provisions of section 475.67, subdivision 3.
Sec. 11. Minnesota Statutes 1992, section 469.184, is
amended by adding a subdivision to read:
Subd. 12. [SECONDARY MARKET.] A city may sell, at private
or public sale, at the price or prices determined by the city, a
note, mortgage, lease, sublease, lease purchase, or other
instrument or obligation evidencing or securing a loan made
under this section.
Sec. 12. [469.192] [ECONOMIC DEVELOPMENT LOANS.]
A statutory city, a home rule charter city, an economic
development authority, a housing and redevelopment authority, or
a port authority may make a loan to a business, a for-profit or
nonprofit organization, or an individual for any purpose that
the entity is otherwise authorized to carry out under sections
116N.08, 469.001 to 469.068, 469.090 to 469.1081, 469.124 to
469.134, 469.152 to 469.165, or any special law.
Sec. 13. Minnesota Statutes 1992, section 471.56,
subdivision 5, is amended to read:
Subd. 5. In addition to other authority granted by this
section, a county containing a city of the first class, a
statutory or home rule charter city of the first or second
class, and a metropolitan agency, as defined in section 473.121,
may:
(1) sell futures contracts but only with respect to
securities owned by it, including securities which are the
subject of reverse repurchase agreements under section 475.76
which expire at or before the due date of the futures contract;
and
(2) enter into option agreements to buy or sell securities
described in section 475.66, subdivision 3, clause (a), but only
with respect to securities owned by it, including securities
which are the subject of reverse repurchase agreements under
section 475.76 which expire at or before the due date of the
option agreement; and
(3) enter into interest rate swap agreements or interest
rate cap agreements with respect to notional principal amounts
that are not greater than one-half of the previous fiscal year's
average investable cash, with counterparties whose equivalent
obligations are rated A+ or better by a nationally recognized
rating agency.
Sec. 14. Minnesota Statutes 1992, section 471.562,
subdivision 3, is amended to read:
Subd. 3. [MUNICIPALITY.] "Municipality" means any city,
however organized a statutory city, a home rule charter city, a
housing and redevelopment authority created pursuant to, or
exercising the powers of such an authority contained in, chapter
462 469, or a port authority created pursuant to, or exercising
the powers of such an authority contained in, chapter 458 469,
or an economic development authority created pursuant to or
exercising the powers of such an authority contained in chapter
469.
Sec. 15. Minnesota Statutes 1992, section 471.562, is
amended by adding a subdivision to read:
Subd. 5. [SECONDARY MARKET.] A municipality may sell, at
private or public sale, at the price or prices determined by the
municipality, a note, mortgage, lease, sublease, lease purchase,
or other instrument or obligation evidencing or securing a loan
described in subdivision 2.
Sec. 16. Minnesota Statutes 1992, section 475.53,
subdivision 5, is amended to read:
Subd. 5. [CERTAIN INDEPENDENT SCHOOL DISTRICTS.] No
independent school district located wholly or partly within a
city of the first class shall issue any obligations unless first
authorized by a two-thirds vote of the governing body of such
city. No such school district shall issue obligations running
with a term of more than two years, whenever the aggregate of
the outstanding obligations of the district equals or exceeds
0.7 percent of the market value of the taxable property within
the school district.
Sec. 17. Minnesota Statutes 1992, section 475.54,
subdivision 16, is amended to read:
Subd. 16. A municipality may enter into an agreement with
a bank or dealer described in section 475.66, subdivision 1, for
an exchange of interest rates pursuant to this subdivision if
the agreement either is with or is guaranteed by a party whose
equivalent obligations are rated A+ or better by a nationally
recognized rating agency. A municipality with outstanding
obligations bearing interest at a variable rate or a
municipality which has determined to issue obligations it is
authorized to issue may agree to pay sums equal to interest at a
fixed rate or at a different variable rate determined pursuant
to a formula set out in the agreement on an amount not exceeding
the outstanding principal amount of the obligations at the time
of payment, in exchange for an agreement by the bank or dealer
counterparty to pay sums equal to interest on a like amount at a
fixed rate or a variable rate determined pursuant to a formula
set out in the agreement or to provide for an interest rate cap
or floor. A municipality with outstanding obligations bearing
interest at a fixed rate or rates may agree to pay sums equal to
interest at a variable rate determined pursuant to a formula set
out in the agreement on an amount not exceeding the outstanding
principal amount of the obligations, in exchange for an
agreement by the bank or dealer to pay sums equal to interest on
a like amount at a fixed rate or rates set out in the
agreement. The agreement to pay the bank or dealer counterparty
is not an obligation of the municipality as defined in section
475.51, subdivision 3. For purposes of calculation of a debt
service levy, determination of a rate of interest on a special
assessment or other calculation based on the rate of interest on
an obligation, a municipality which has entered into an interest
rate swap agreement described in this subdivision may determine
to treat the amount or rate of interest on the obligation as the
net rate or amount of interest payable after giving effect to
the swap agreement. Subject to any applicable bonds bond
covenants, any payments required to be made by the municipality
under the swap agreement may be made from sums secured the
municipality may pledge to the payment of amounts due or to
become due under the swap agreement, including termination
payments, sources of payment pledged or available to pay debt
service on the obligations with respect to which the swap
agreement was made or from any other available source of the
municipality. A municipality may issue obligations under
section 475.67 to provide for any payment, including a
termination payment, due or to become due under a swap agreement.
Sec. 18. Minnesota Statutes 1992, section 475.66,
subdivision 1, is amended to read:
Subdivision 1. All debt service funds shall be deposited
and secured as provided in chapter 118, except for amounts
invested as authorized in this section, and may be deposited in
interest-bearing accounts, and such deposits may be evidenced by
certificates of deposit with fixed maturities. Sufficient cash
for payment of principal, interest, and redemption premiums when
due with respect to the obligations for which any debt service
fund is created shall be provided by crediting to the fund the
collections of tax, special assessment, or other revenues
appropriated for that purpose, and depositing all such receipts
in a depository bank or banks duly qualified according to law or
investing and reinvesting such receipts in securities authorized
in this section. Time deposits shall be withdrawable and
certificates of deposit and investments shall mature and shall
bear interest payable at times and in amounts which, in the
judgment of the governing body or its treasurer or other officer
or committee to which it has delegated investment decisions,
will provide cash at the times and in the amounts required for
the purposes of the debt service fund, provided however, that
the governing body may authorize the purchase of longer term
investments subject to an agreement to repurchase such
investments at times and prices sufficient to yield the amounts
estimated to be so required, provided that the exclusion as
investments of mortgage-backed securities that are defined as
high risk under subdivision 5 does not apply to repurchase
agreements if the margin requirement under the repurchase
agreement is 101 percent. Repurchase agreements may be entered
into with
(1) a bank qualified as depository of money held in the
debt service fund;
(2) any national or state bank in the United States which
is a member of the federal reserve system and whose combined
capital and surplus equals or exceeds $10,000,000;
(3) a primary reporting dealer in United States government
securities to the federal reserve bank of New York; or
(4) a securities broker-dealer having its principal
executive office in Minnesota, licensed pursuant to chapter 80A,
or an affiliate of it, regulated by the securities and exchange
commission and maintaining a combined capital and surplus of
$40,000,000 or more, exclusive of subordinated debt.
Sec. 19. [EFFECTIVE DATE.]
Section 2 is effective for claims submitted by a claimant
agency after June 30, 1994. Section 3 is effective for taxes
levied in 1994, payable in 1995, and subsequent years. The
remainder of this act is effective the day following final
enactment.
Presented to the governor May 6, 1994
Signed by the governor May 10, 1994, 4:42 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes