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Office of the Revisor of Statutes

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.