Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 248-S.F.No. 1876
An act relating to public administration; imposing and
modifying conditions and limitations on the use of
public debt; providing for the Dakota county community
development agency and the Cuyuna Range joint powers
economic development authority; reenacting certain
provisions relating to taxes, abatements, and tax
increments; clarifying the treatment of property of
certain limited liability companies for certain
property tax exemption purposes; broadening certain
revenue bonding authority involving certain nonprofit
facilities and to refund certain youth-based-ice
facility debt; authorizing the city of Duluth to
provide for certain refunding bonds; removing a
condition for the issuance of certain bonds by the
Long Prairie housing and redevelopment authority;
temporarily expanding an exception to competitive
bidding requirements for certain bond-financed
structured parking facilities; authorizing the city of
Woodbury to issue general obligations to finance
construction of a highway interchange and related
improvements; authorizing the use of enterprise zone
incentive grants for certain purposes by Minneapolis
and St. Paul; amending Minnesota Statutes 1998,
sections 126C.55, subdivision 7; 272.02, by adding a
subdivision; 383D.41, subdivisions 1, 2, 3, and by
adding subdivisions; 469.155, subdivision 4; 469.305,
subdivision 1; 473.39, by adding a subdivision;
473.898, subdivision 3; 475.56; 475.58, by adding a
subdivision; and 475.60, subdivisions 1 and 3.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 126C.55,
subdivision 7, is amended to read:
Subd. 7. [ELECTION AS TO MANDATORY APPLICATION.] A
district may covenant and obligate itself, prior to the issuance
of an issue of debt obligations, to notify the commissioner of a
potential default and to use the provisions of this section to
guarantee payment of the principal and interest on those debt
obligations when due. If the district obligates itself to be
bound by this section, it must covenant in the resolution that
authorizes the issuance of the debt obligations to deposit with
the paying agent three business days prior to the date on which
a payment is due an amount sufficient to make that payment or to
notify the commissioner under subdivision 1 that it will be
unable to make all or a portion of that payment. A district
that has obligated itself must include a provision in its
agreement with the paying agent for that issue that requires the
paying agent to inform the commissioner if it becomes aware of a
potential default in the payment of principal or interest on
that issue or if, on the day two business days prior to the date
a payment is due on that issue, there are insufficient funds to
make the payment on deposit with the paying agent. Funds
invested in a refunding escrow account established under section
475.67 that are to become available to the paying agent on a
principal or interest payment date are deemed to be on deposit
with the paying agent three business days before the payment
date. If a district either covenants to be bound by this
section or accepts state payments under this section to prevent
a default of a particular issue of debt obligations, the
provisions of this section shall be binding as to that issue as
long as any debt obligation of that issue remain outstanding.
If the provisions of this section are or become binding for more
than one issue of debt obligations and a district is unable to
make payments on one or more of those issues, the district must
continue to make payments on the remaining issues.
Sec. 2. Minnesota Statutes 1998, section 272.02, is
amended by adding a subdivision to read:
Subd. 1b. [TREATMENT OF PROPERTY OF CERTAIN LIMITED
LIABILITY COMPANIES.] For purposes of the exemptions granted by
subdivision 1, property owned or operated by a limited liability
company consisting of a sole member shall be treated as if owned
or operated by that member.
Sec. 3. Minnesota Statutes 1998, section 383D.41,
subdivision 1, is amended to read:
Subdivision 1. [HOUSING AND REDEVELOPMENT AUTHORITY
COMMUNITY DEVELOPMENT AGENCY.] There is hereby created in Dakota
county a public body corporate and politic, to be known as the
Dakota county housing and redevelopment authority community
development agency, having all of the powers and duties of a
housing and redevelopment authority under sections 469.001 to
469.047; which act applies and all powers and duties of a county
housing and redevelopment authority under any other provisions
of Minnesota law. Sections 469.001 to 469.047 and 469.090 to
469.1081 apply to the county of Dakota. For the purposes of
applying the provisions of the municipal housing and
redevelopment act sections 469.001 to 469.047 and 469.090 to
469.1081 to Dakota county, and subject to the provisions of this
section, the county has all of the powers and duties of a
municipality, the county board has all of the powers and duties
of a governing body, the chair of the county board has all of
the powers and duties of a mayor, and the area of operation
includes the area within the territorial boundaries of the
county.
Sec. 4. Minnesota Statutes 1998, section 383D.41,
subdivision 2, is amended to read:
Subd. 2. This section shall not limit or restrict any
existing housing and redevelopment authority or prevent a
municipality from creating an authority. The county shall not
exercise jurisdiction in any municipality where a municipal
housing and redevelopment authority is established. A municipal
housing and redevelopment authority may request the Dakota
county housing and redevelopment authority community development
agency to handle the housing duties of the authority and, in
such an event,. If the municipal authority makes the request,
the Dakota county housing and redevelopment authority community
development agency shall act and have exclusive jurisdiction for
housing in the municipality pursuant to sections 469.001 to
469.047. A transfer of duties relating to housing shall does
not transfer any duties relating to redevelopment.
Sec. 5. Minnesota Statutes 1998, section 383D.41,
subdivision 3, is amended to read:
Subd. 3. If any housing or project, development district,
redevelopment project, or economic development project is
constructed in Dakota county pursuant to this authorization, and
such the project is within the boundaries of any incorporated
home rule charter or statutory city, the location of such the
project shall must be approved by the governing body of the
city, and:
(1) in the case of any housing project or housing
development project, by the municipal housing and redevelopment
authority established for the city if it has not previously
requested that the Dakota county community development agency or
its predecessor agency handle the housing duties of the
authority; or
(2) in the case of any redevelopment project by the
municipal housing and redevelopment authority established for
the city.
Sec. 6. Minnesota Statutes 1998, section 383D.41, is
amended by adding a subdivision to read:
Subd. 7. [DAKOTA COUNTY COMMUNITY DEVELOPMENT AGENCY.] (a)
After December 31, 1999, the Dakota county housing and
redevelopment authority shall be known as the Dakota county
community development agency. In addition to the other powers
granted in this section, the Dakota county community development
agency shall have the powers of an economic development
authority under sections 469.090 to 469.1081 that are granted to
the agency by resolution adopted by the Dakota county board of
commissioners, except as provided in paragraph (b). The agency
may exercise any of the powers granted to it under sections
469.001 to 469.047 and any of the powers of an economic
development authority granted to it by the Dakota county board
of commissioners for the purposes described in these sections.
(b) The Dakota county community development agency may not
levy the tax described in section 469.107, but with the approval
of the Dakota county board may increase its levy of the special
tax described in section 469.033, subdivision 6, to an amount
not exceeding 0.01813 percent of net tax capacity, or any higher
limit authorized under section 469.107 or 469.033, subdivision 6.
Sec. 7. Minnesota Statutes 1998, section 383D.41, is
amended by adding a subdivision to read:
Subd. 8. [OFFERS OF TAX-FORFEITED LANDS.] Notwithstanding
any other law, Dakota county may offer to the Dakota county
community development agency, under the conditions and policies
established by the county, nonconservation tax-forfeited land
prior to making the properties available to cities in Dakota
county.
Sec. 8. Minnesota Statutes 1998, section 469.155,
subdivision 4, is amended to read:
Subd. 4. [REFINANCING HEALTH NONPROFIT FACILITIES.] It may
issue revenue bonds to pay, purchase, or discharge all or any
part of the outstanding indebtedness of a contracting party that
is an organization described in section 501(c)(3) of the
Internal Revenue Code primarily engaged in health care-related
activities or in activities for mentally or physically disabled
persons or that is engaged primarily in the operation of one or
more nonprofit hospitals or nursing homes previously incurred in
the acquisition or betterment of its existing hospital or
nursing home facilities to the extent deemed necessary by the
governing body of the municipality or redevelopment agency; this
may include any unpaid interest on the indebtedness accrued or
to accrue to the date on which the indebtedness is finally paid,
and any premium the governing body of the municipality or
redevelopment agency determines to be necessary to be paid to
pay, purchase, or defease the outstanding indebtedness. If
revenue bonds are issued for this purpose, the refinancing and
the existing properties of the contracting party shall be deemed
to constitute a project under section 469.153, subdivision 2,
clause (b), (c), or (d).
Sec. 9. Minnesota Statutes 1998, section 469.305,
subdivision 1, is amended to read:
Subdivision 1. [INCENTIVE GRANTS.] (a) An incentive grant
is available to businesses located in an enterprise zone that
meet the conditions of this section. Each city designated as an
enterprise zone is allocated $3,000,000 to be used to provide
grants under this section for the duration of the program. Each
city of the second class designated as an economically depressed
area by the United States Department of Commerce is allocated
$300,000 to be used to provide grants under this section for the
duration of the program. For fiscal year 1998 and subsequent
years, the proration in section 469.31 shall continue to apply
until the amount designated in this subdivision is expended.
For the allocation in fiscal year 1998 and subsequent years, the
commissioner may use up to 15 percent of the allocation to the
city of Minneapolis for a grant to the city of Minneapolis and
up to 15 percent of the allocation to the city of St. Paul for a
grant to the city of St. Paul, for administration of the program
or employment services provided to the employers and employees
involved in the incentive grant program under this section. The
commissioner may authorize the use of grant funds for
employer-focused workforce development initiatives designed to
promote the hiring and retention of city residents.
(b) The incentive grant is in an amount equal to 20 percent
of the wages paid to an employee, not to exceed $5,000 per
employee per calendar year. The incentive grant is available to
an employer for a zone resident employed in the zone at
full-time wage levels of not less than 110 percent of the
federal poverty level for a family of four, as determined by the
United States Department of Agriculture. The incentive grant is
not available to workers employed in construction or employees
of financial institutions, gambling enterprises, public
utilities, sports, fitness, and health facilities, or
racetracks. The employee must be employed at that rate at the
time the business applies for a grant, and must have been
employed for at least one year at the business. A grant may be
provided only for new jobs; for purposes of this section, a "new
job" is a job that did not exist in Minnesota before May 6,
1994. The incentive grant authority is available for the five
calendar years after the application has been approved to the
extent the allocation to the city remains available to fund the
grants, and if the city certifies to the commissioner on an
annual basis that the business is in compliance with the plan to
recruit, hire, train, and retain zone residents. The employer
may designate an organization that provides employment services
to receive all or a portion of the employer's incentive grant.
Sec. 10. Minnesota Statutes 1998, section 473.39, is
amended by adding a subdivision to read:
Subd. 1g. [OBLIGATIONS; 2000-2002.] In addition to the
authority in subdivisions 1a, 1b, 1c, 1d, and 1e, the council
may issue certificates of indebtedness, bonds, or other
obligations under this section in an amount not exceeding
$36,000,000, which may be used for capital expenditures, other
than for construction, maintenance, or operation of light rail
transit, as prescribed in the council's transit capital
improvement program and for related costs, including the costs
of issuance and sale of the obligations. The funds must be
proportionally spent on capital improvement projects as
recommended by the regional transit capital evaluation committee.
Sec. 11. [APPLICATION.]
Section 10 applies in the counties of Anoka, Carver,
Dakota, Hennepin, Ramsey, Scott, and Washington.
Sec. 12. Minnesota Statutes 1998, section 473.898,
subdivision 3, is amended to read:
Subd. 3. [LIMITATIONS.] (a) The principal amount of the
bonds issued pursuant to subdivision 1, exclusive of any
original issue discount, shall not exceed the amount of
$10,000,000 plus the amount the council determines necessary to
pay the costs of issuance, fund reserves, debt service, and pay
for any bond insurance or other credit enhancement.
(b) In addition to the amount authorized under paragraph
(a), the council may issue bonds under subdivision 1 in a
principal amount of $3,306,300, plus the amount the council
determines necessary to pay the cost of issuance, fund reserves,
debt service, and any bond insurance or other credit
enhancement. The proceeds of bonds issued under this paragraph
may not be used to finance portable or subscriber radio sets.
Sec. 13. Minnesota Statutes 1998, section 475.56, is
amended to read:
475.56 [INTEREST RATE.]
(a) Any municipality issuing obligations under any law may
issue obligations bearing interest at a single rate or at rates
varying from year to year which may be lower or higher in later
years than in earlier years. Such higher rate for any period
prior to maturity may be represented in part by separate coupons
designated as additional coupons, extra coupons, or B coupons,
but the highest aggregate rate of interest contracted to be so
paid for any period shall not exceed the maximum rate authorized
by law. Such higher rate may also be represented in part by the
issuance of additional obligations of the same series, over and
above but not exceeding two percent of the amount otherwise
authorized to be issued, and the amount of such additional
obligations shall not be included in the amount required by
section 475.59 to be stated in any bond resolution, notice, or
ballot, or in the sale price required by section 475.60 or any
other law to be paid; but if the principal amount of the entire
series exceeds its cash sale price, such excess shall not, when
added to the total amount of interest payable on all obligations
of the series to their stated maturity dates, cause the average
annual rate of such interest to exceed the maximum rate
authorized by law. This section does not authorize a provision
in any such obligations for the payment of a higher rate of
interest after maturity than before.
(b) Any municipality issuing obligations under any law may
sell original issue discount obligations having a stated
principal amount in excess of the authorized amount and the sale
price, provided that:
(1) the sale price does not exceed by more than two percent
the amount of obligations otherwise authorized to be issued;
(2) the underwriting fee, discount, or other sales or
underwriting commission does not exceed two percent of the sale
price; and
(3) the discount rate necessary to present value total
principal and interest payments over the term of the issue to
the sale price does not exceed the lesser of the maximum rate
permitted by law for municipal obligations or ten percent.
(c) Any obligation of an issue of obligations otherwise
subject to section 475.55, subdivision 1, may bear interest at a
rate varying periodically at the time or times and on the terms,
including convertibility to a fixed rate of interest, determined
by the governing body of the municipality, but the rate of
interest for any period shall not exceed the maximum rate of
interest for the obligations determined in accordance with
section 475.55, subdivision 1. For purposes of section 475.61,
subdivisions 1 and 3, the interest payable on variable rate
obligations for their term shall be determined as if their rate
of interest is the maximum rate permitted for the obligations
under section 475.55, subdivision 1, or the lesser maximum rate
of interest payable on the obligations in accordance with their
terms, but if the interest rate is subsequently converted to a
fixed rate the levy may be modified to provide at least five
percent in excess of amounts necessary to pay principal of and
interest at the fixed rate on the obligations when due. For
purposes of computing debt service or interest pursuant to
section 475.67, subdivision 12, interest throughout the term of
bonds issued pursuant to this subdivision is deemed to accrue at
the rate of interest first borne by the bonds. The provisions
of this paragraph do not apply to obligations issued by a
statutory or home rule charter city with a population of less
than 7,500, as defined in section 477A.011, subdivision 3, or to
obligations that are not rated A or better, or an equivalent
subsequently established rating, by Standard and Poor's
Corporation, Moody's Investors Service or other similar
nationally recognized rating agency, except that any statutory
or home rule charter city, regardless of population or bond
rating, may issue variable rate obligations as a participant in
a bond pooling program established by the league of Minnesota
cities that meets this bond rating requirement.
Sec. 14. Minnesota Statutes 1998, section 475.58, is
amended by adding a subdivision to read:
Subd. 3a. [YOUTH ICE FACILITIES.] A municipality may,
without regard to the election requirement under subdivision 1
or under any other provision of law or home rule charter, issue
and sell obligations to refund existing debt of an indoor ice
arena that is used predominantly for youth athletic activity if
all the following conditions are met:
(1) the obligations are secured by a pledge of revenues
from the facility; and
(2) the governing body of the municipality finds, based on
analysis provided by a professional experienced in finance, that
the facility's revenues and other available money will be
sufficient to pay the obligations, without reliance on a
property tax levy or the municipality's general purpose state
aid.
Sec. 15. Minnesota Statutes 1998, section 475.60,
subdivision 1, is amended to read:
Subdivision 1. [ADVERTISEMENT.] All obligations shall be
negotiated and sold by the governing body, except when authority
therefor is delegated by the governing body or by the charter of
the municipality to a board, department, or officers of the
municipality. Except as provided in section 475.56, obligations
shall be sold at not less than par value plus accrued interest
to date of delivery and not greater than two percent greater
than the amount authorized to be issued plus accrued interest.
Except as provided in subdivision 2 all obligations shall be
sold at public competitive sale after notice given at least ten
days in advance by publication in a legal newspaper having
general circulation in the municipality and ten days in advance
by publication in a daily or weekly periodical published in a
Minnesota city of the first class, or its metropolitan area,
which circulates throughout the state and furnishes financial
news as a part of its service as provided in subdivision 3.
Sec. 16. Minnesota Statutes 1998, section 475.60,
subdivision 3, is amended to read:
Subd. 3. [PUBLISHED NOTICE.] Published notice The notice
of sale to prospective bidders, where required, shall specify
the maximum principal amount of the obligations, the place of
receipt and consideration of bids and such other details as to
the obligations and terms of sale as the governing body or the
municipality's authorized financial consultant deems suitable.
The published notice shall either specify the date and time for
receipt of bids or provide that the bids will be received at a
date and time not less than ten nor more than 60 days after the
date of publication. If the published notice does not state the
specific date or amount for the sale, it shall specify the
manner in which notice of the date or amount of the sale will be
given to prospective bidders. Notification of prospective
bidders shall be given by mail, facsimile, electronic data
transmission or other form of communication common to the
municipal bond trade at least four two days (omitting Saturdays,
Sundays, and legal holidays) before the date for receipt of bids
to at least five firms determined by the governing body or its
financial consultant to be prospective bidders, or shall be
published in a newspaper or other periodical which circulates
throughout the state and furnishes financial news as part of its
service. If within five days after the date of publication a
prospective bidder requests in writing to be notified by mail,
the municipality shall do so. Failure to give the notice as
described in the preceding sentence to a bidder this subdivision
shall not affect the validity of the sale or of the
obligations. Bids may be accepted by facsimile or other
electronic transmission or in writing as specified by the
governing body or its financial consultant. The governing body
may employ an agent to receive and open the bids at any place
within or outside the corporate limits of the municipality, in
the presence of an officer of the municipality or the officer's
designee, but the obligations shall not be sold except by action
of the governing body or authorized officers of the municipality
after communication of the bids to them. Additional notice may
be given for such time and in such manner as the governing body
deems suitable. At the time and place so fixed, the bids shall
be opened considered and the offer complying with the terms of
sale and deemed most favorable shall be accepted, but the
governing body may reject any and all such offers, in which
event, or if no offers have been received, it may award the
obligations to any person who within 30 days thereafter presents
an offer complying with the terms of sale and deemed more
favorable than any received previously, or upon like notice the
governing body may invite other bids upon the same or different
terms and conditions, except that if the original published
notice does not state the specific date or amount for the sale
and if the material terms and conditions of the sale remain the
same, except for the date and amount, notice of the date or
amount may be given in the manner provided above.
Sec. 17. [CUYUNA RANGE JOINT POWERS ECONOMIC DEVELOPMENT
AUTHORITY.]
The Cuyuna Range joint powers economic development
authority, originally established by resolutions of the member
cities, is authorized to act as an economic development
authority and may exercise the powers of an economic development
authority under Minnesota Statutes, sections 469.090 to
469.1081, that are delegated to it by the member cities,
including, without limitation, the authority to own and operate
a civic center facility that includes athletic and other public
facilities.
Sec. 18. [CERTAIN TAXES.]
The provisions of Laws 1997, chapter 231, article 1,
sections 4, 5, 6, 8, and 15, are reenacted.
Sec. 19. [TAX ABATEMENT.]
The provisions of Laws 1997, chapter 231, article 2,
sections 45 to 48, inclusive, are reenacted.
Sec. 20. [TAX INCREMENT.]
The provisions of Laws 1997, chapter 231, article 10, are
reenacted.
Sec. 21. [CITY OF DULUTH; REFUNDING BONDS; DULUTH
ENTERTAINMENT AND CONVENTION CENTER AUTHORITY.]
The Duluth city council may by ordinance provide for the
issuance and sale of general obligation revenue refunding bonds
to refund in advance of their maturity, the city's gross revenue
recreation facility bonds Duluth Entertainment Convention
Center/Imax Dome Theater Project series 1994, dated as of
December 1, 1994. These refunding bonds must be issued with the
full faith and credit of the city. The Duluth entertainment and
convention center authority shall pledge the net revenues of the
authority's facilities for payment and principal and interest on
these refunding bonds. The issuance of the refunding bonds is
subject to the provisions of Minnesota Statutes, chapter 475,
except that no election is required unless a referendum on the
ordinance is required under section 52 of the Duluth city
charter.
Sec. 22. [AUTHORIZATION.]
If the Long Prairie housing and redevelopment authority
issues bonds under Minnesota Statutes, section 469.034,
subdivision 2, to provide funds to renovate the Hotel Reichert
building on the National Register of Historic Places for a
qualified housing development project, the project is not
required to be owned by the authority for the term of the
bonds. The bonds are subject to all other requirements of
Minnesota Statutes, section 469.034, subdivision 2.
Sec. 23. [COMPETITIVE BIDDING; STRUCTURED PARKING.]
A structured parking facility qualifies under Minnesota
Statutes, section 469.015, subdivision 4, paragraph (a), clause
(2)(i), if the structured parking facility is immediately
adjacent to the development and the bonds are issued before
February 1, 2000.
Sec. 24. [BONDS AUTHORIZED.]
The city of Woodbury may issue general obligations to
provide funding for the construction of a highway interchange at
the intersection of I-494 and Tamarack Road and for road and
bridge improvements on the portion of the interchange that are
required as a result of construction of the interchange. The
obligations must be issued under Minnesota Statutes, chapter
475, except that no referendum is required under Minnesota
Statutes, section 475.58.
Sec. 25. [INSTRUCTION TO THE REVISOR.]
In the 2000 edition of Minnesota Statutes, the revisor of
statutes shall change "Dakota county housing and redevelopment
authority" to "Dakota county community development agency"
wherever it appears.
Sec. 26. [EFFECTIVE DATES.]
Sections 3 to 7 are effective upon compliance by the Dakota
county board of commissioners with the provisions of Minnesota
Statutes, section 645.021. Section 18 is effective retroactive
for taxes payable in 1999 and thereafter. Section 19 is
effective retroactive for the 1997 assessment and thereafter,
for taxes payable in 1998 and thereafter. Section 20 is
effective retroactive to the dates specified in Laws 1997,
chapter 231, article 10, section 25. Section 21 is effective
upon approval by the Duluth city council and the Duluth
entertainment and convention center authority, and upon
compliance with the provisions of Minnesota Statutes, section
645.021. Section 22 is effective the day after the latter of
the certificates of approval of the Long Prairie city council
and the board of commissioners of the Long Prairie housing and
redevelopment authority is filed in compliance with Minnesota
Statutes, section 645.021, subdivision 3. The rest of this act
is effective the day following final enactment.
Presented to the governor May 24, 1999
Signed by the governor May 25, 1999, 11:37 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes